By TIOL News Service

MUMBAI, JUNE 11, 2018: THE appellant deposited the adjudged dues of duty, interest and 25% penalty confirmed by order-in-original dated 30.6.2011. In appeal before Tribunal they succeeded and, therefore, filed a refund claim in respect of the amount deposited.

Refund was granted but without any interest.

Aggrieved against denial of interest, an Appeal was filed but the Commissioner(A) did not rule in their favour.

The matter is now in the CESTAT.

The appellant submitted that they are entitled for interest right from the date of deposit of the amount in view of the apex court decision in ONGC Ltd. - 2007-TIOL-138-SC-CUS.

The AR submitted that the refund became mature only after the demand order was set aside by the Tribunal and since the refund was sanctioned within three months from the date of filing application u/s 11B, no interest is payable. Reliance is placed on the decisions in Ranbaxy Laboratories Ltd. - 2011-TIOL-105-SC-CX, Indian Thermoplastics (P) Ltd. - 2003-TIOL-234-CESTAT-DEL-LB.

The Bench considered the submissions and inter alia observed –

+ On plain reading of Section 11BB, the interest is payable from three months from the date of application. Except the provision of Section 11BB, there is no provision by which the interest can be granted from the date of deposit.

+ This Tribunal, being a creature under the statute of Central Excise Act, cannot go beyond the statutory provision made under that Act. Therefore, the interest is not payable from the date of deposit, but it is payable only after three months of filing the application.

After distinguishing the case law(s) cited by the appellant, the CESTAT adverted to the provision of Section 11B(5)(B)(ec) of the CEA, 1944 defining 'relevant date' which reads:-

"(ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction."

Thereafter, the Tribunal observed -

+ The 'relevant date' means in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction.

+ As per the above provision, the refund becomes matured only as a consequence of the Appellate Tribunal's order. When the refund itself is not matured prior to the date of Appellate Tribunal's order, there is no question of interest for the period prior to the date of order.

Holding that the appeal does not survive, the same was dismissed.