Govind Mills Ltd. vs Commissioner of C. Ex.

By means of the present writ petition, the petitioner has challenged the order dated 5-7-2004 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, by which the Tribunal has allowed the interest at the rate prescribed under the law after three months from the date of filing of refund application till the date of payment. Sri S.D. Singh, Senior Advocate, appearing on behalf of the petitioner, states that a search was conducted at the premises of the petitioner on 12-8-1998. By coercive method being adopted against the petitioner, a sum of Rs. 20 lacs had been deposited on 12-8-1998. By the order dated 6-12-2000, the adjudicating authority had raised a demand of Rs. 21 lacs and had adjusted the aforesaid amount of Rs. 21 lacs. Against the said order, the petitioner filed an appeal before the Tribunal. The Tribunal vide order dated 15-5-2002 2002 (147) ELT 1106 set aside the demand order of the adjudicating authority. The petitioner moved an application for the refund of the amount on 8-7-2002, which has been allowed and in pursuance thereof, the amount had been refunded on 11-3-2003, however, the interest u/s 11B of the Act had not been paid. The petitioner filed an application for the payment of interest, which has been rejected vide order dated 11-6-2003. Against the said order, the petitioner filed an appeal before the Commissioner of Central Excise which has been dismissed vide order dated 11-11-2003 against which the petitioner filed second appeal before the Tribunal, which has been allowed with the following observation:

"It is well settled that in case of delayed payment of pre-deposit amount by the Department, the assessee is entitled to the interest thereon in accordance with law u/s 11BB. The perusal of the said section leaves no doubt that the assessee is entitled to interest if the payment had not been paid to him within 3 months of the finalisation of the claim. In this context reference may also be made to the ratio of law laid down in 2004 (166) ELT 276 Therefore, the petitioners who had been denied the refund of pre-deposit amount without any justification are entitled to interest thereon @ as prescribed under the law, after 3 months from the date of the refund application moved by the petitioners. Therefore, the impugned order of the Commissioner (Appeals) denying the interest is set aside. The petitioners are allowed interest @ prescribed under the law after 3 months from the date of the filing of the refund application, till the date of payment."

Learned counsel for the petitioner submitted that against the order of the Tribunal, the Revenue filed an appeal before the Hon''ble Supreme Court, which has been dismissed on 25-10-2007 along with other connected Civil Appeals with the following observations:

"The point in dispute in the present appeals is as to whether the pre-deposit made as a condition precedent for the hearing of the appeals under the Central Excise Act, 1944 was, on the assessee being ultimately successful, refundable to the assessee with interest. The said point is concluded by a judgment of this Court in the case of Commissioner of Central Excise, Hyderabad v. I.T.C. Ltd. - 2005 (179) E.L.T. 15 decided on 2nd December, 2004. Moreover, subsequent to the said judgment, the Central Board of Excise & Customs has also issued a circular bearing No. 802/35/2004-CX, dated 8th December, 2004 allowing payment of interest on delayed refund of amount of pre-deposit.

In view of what has been stated above, these appeals are dismissed leaving the parties to bear their own costs."

He submitted that in the case of Commissioner of Central Excise, Hyderabad v. I.T.C. Ltd. - 2005 (179) E.L.T. 15, the Hon''ble Supreme Court has directed for payment of interest @ 12%. He further submitted that the petitioner is also entitled for the interest for the period 12-8-1998 till 6-12-2000 when the adjudication order has been passed inasmuch as the said amount has been illegally retained without any legal demand against the petitioner.

We have considered the submissions of learned counsel for the petitioner. No one appears on behalf of the respondent.

So far as claim of the petitioner that he is entitled for the interest for the period 12-8-1998 till 6-12-2000 on the amount of Rs. 20 lacs which has been deposited in pursuance of the search, we do not find any substance.

From perusal of the orders of the Tribunal and the authorities below, it appears that no such claim has been made. Before the Tribunal the only question for consideration was whether the petitioner was entitled to claim interest on the refund amount after three months from the date of filing of the application or not. This is apparent from first paragraph of the order of the Tribunal. The petitioner has not enclosed any grounds of appeal before the Tribunal, therefore, such plea cannot be entertained at this stage.

So far as rate of interest @ 12% is concerned, the Tribunal, in its order dated 5-7-2004, has observed that the petitioners are allowed interest at the rate prescribed under the law after three months from the date of filing of the refund application. The interest @ 12% has been provided by Hon''ble Supreme Court, there is no reason that the petitioner may not get interest @ 12%. No direction in this regard is necessary to be issued. With the aforesaid observations, the writ petition stands dismissed.