Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

Comments

Print   |    |  Comment

PJ/Case Law /2016-17/3340

Is the assessee is entitled to interest @ 12% or 6% as per Sec 11BB of the Act w.e.f. 21-8-08 & whether findings of Tribunal contrary to the record?

Case:-SHREEWOOD PRODUCTS PVT. LTD. VersusCOMMISSIONER OF CENTRAL EXCISE
Citation:-2016 (340) E.L.T. 79 (P & H)
Brief facts:-The present appeal was filed by the assessee arising out of Final Order No. A/50039/2015-EX(DB) dated 14-1-2015 [2015 (318) E.L.T. 663 (Tribunal)], passed by Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short, ‘the Tribunal’) raising the following substantial questions of law :
“(i)Whether the appellant is entitled to interest w.e.f. 21-8-2008?
(ii)Whether the appellant is entitled to interest @ 12% or 6% in terms of Section 11BB of the Act?
(iii)Whether the findings of learned Tribunal are perverse and contrary to the record?”
The brief facts of the case are that the appellant is engaged in the manufacture of plywood, block boards, flush doors and penal doors. The respondent issued show cause notice to the appellant on 24-2-1997 proposing to levy excise duty and penalty for the period from March, 1992 to March, 1996. The adjudicating authority, vide Order-in-Original dated 11-11-2005 confirmed the amount of duty amounting to `Rs. 99.22 lacs. In addition, penalty of Rs. 98.72 lacs was also imposed. Aggrieved against the order, the appellant preferred appeal before the Tribunal along with application for exemption from pre-deposit. As the appellant could not comply with the stay order, the Tribunal vide order dated 20-7-2006 dismissed the appeal of the appellant. Thereafter, the appellant disposed of its factory and deposited the entire amount of duty, interest and penalty amounting to Rs.1,92,95,372/-. On deposit thereof, the appeal of the appellant was restored by the Tribunal and heard on merits. Vide order dated 2-5-2008 [2008 (231) E.L.T. 671 (Tri. - Del.)], the appeal preferred by the appellant was allowed by the Tribunal. The demand was set aside and the matter was remitted back to be disposed of in terms of the directions issued. As the order was set aside, the appellant became entitled to refund of the amount deposited by it. A request to that effect was made by the appellant vide letter dated 22-5-2008, however, the same was not acceded to. Even the reminders sent subsequently were also not responded to. Even though the remand proceedings were decided by the adjudicating authority vide order dated 17-10-2008 and finally demand of merely ` 11,89,303/- was confirmed against the appellant with equivalent penalty. Partially the refund was granted to the appellant on 13-1-2009, whereas partially the same was granted on 17-4-2009. The appellant claimed interest on delayed refund of the amount. The application for refund of the amount along with interest thereon was dealt with by the Assistant Commissioner by passing the Order-in-Appeal on 13-1-2009 after appropriating part of the amount against demand raised vide order dated 17-10-2008. ` 88,72,686/- were directed to be credited to Consumer Welfare Fund and refund of ` 76,44,080/- was directed. The appellant preferred appeal. The Commissioner (Appeals), vide order dated 17-3-2009 accepted the appeal filed by the appellant and directed even refund of ` 88,72,686/- opining that the same was not hit by bar of unjust enrichment. In pursuance thereof, the aforesaid amount was paid to the appellant on 17-4-2009. As the claim of the appellant for payment of interest was declined on the ground that the amount was refunded within three months from the claim of refund on 21-10-2008 and partially the amount was refunded within three months of the passing of the order. Aggrieved against the order, the appellant preferred appeal before the Tribunal, which was dismissed vide order dated 14-1-2015 declining the relief of interest.
Appellant’s contention:-Learned counsel for the appellant submitted that the issue regarding entitlement of interest on the amount of pre-deposit made by the assessee after decision of the case came up for consideration before Hon’ble the Supreme Court in Commissioner of Central Excise, Hyderabad v. I.T.C. Ltd., 2005 (179) E.L.T. 15 (S.C.). The appeals were disposed of by Hon’ble the Supreme Court taking into consideration a circular issued by the Government of India, Ministry of Finance No. 275/37/2K-CX.8A, dated 2-1-2002. However, in one of the cases before Hon’ble the Supreme Court, the rate of interest was reduced from 15% to 12% per annum. The circular of the Government of India provided that formal application for refund was not required. A simple letter from the person is sufficient along with copy of the order, on the basis of which the refund became due. He further relied upon a Division Bench judgment of this Court in CWP No. 22541 of 2012 - M/s. LSE Securities Ltd. v. Assistant Commissioner, Service Tax Division, Chandigarh, decided on 6-5-2014 [2015 (320) E.L.T. 350 (P & H)], where interest @ 15% per annum was directed to be paid for the period after three months from the date the refund became due. Reference was also made to another Division Bench judgment of this Court in CWP No. 16213 of 2014 - Haryana Vanaspati & General Mill v. The State of Haryana and Another, decided on 7-8-2015, whereunder the Haryana General Sales Tax Act, 1973, this Court directed for payment of interest @ 12% per annum on the amount deposited from the date the deposits were made as finally the assessee succeeded in litigation. The submission is that after the Tribunal set aside the demand against the appellant on 2-5-2008, it became entitled to the refund of amount deposited. The application for refund was made immediately thereafter on 22-5-2008. As the amount was refunded in January and April, 2009, the appellant was entitled to interest for the period beyond three months from the date of passing of the order of the Tribunal @ 12% per annum, as awarded by Hon’ble the Supreme Court in I.T.C. Ltd.’s case (supra).
 
Respondent’s contention:-On the other hand, learned counsel for the respondent submitted that as is evident from the order passed by the Tribunal, the application for refund was filed on 21-10-2008 and partially the amount was refunded within three months thereof, as for part of the amount there was dispute. When the same was settled, the amount was immediately refunded, hence, the appellant is not entitled to any interest. He further submitted that even if interest for any part of the period is to be paid, the same should not be at a rate more than 6% per annum.
Reasoning of judgment:-Heard learned counsel for the parties and perused the paper book.
The undisputed facts on record are that demand of duty of ` 99.22 lacs was raised against the appellant vide Order-in-Original dated 11-11-2005. In addition, penalty of Rs.98.72 lacs was also imposed. The appellant deposited’ Rs.1,92,95,372/-. The appeal was heard by the Tribunal, which was allowed vide order dated 2-5-2008 and the demand was set aside. Part of the amount, i.e., Rs. 76,44,080/- was refunded to the appellant in January, 2009, whereas remaining part of the amount, i.e., Rs.88,72,686/- was refunded in April, 2009. As per the circular of the Government of India, Ministry of Finance, as referred to above, in case the amount is not refunded within three months from the date of passing of the order, the assessee is entitled to interest. No formal application is required to be filed. A simple letter is sufficient for the same. The application in the present case was filed by the appellant on 22-5-2008. There is error in the date noticed in the order passed by the authority for filing the application as 21-10-2008. Hon’ble the Supreme Court in I.T.C. Ltd.’s case (supra) allowed the refund along with interest @ 12% per annum.
Keeping in view the aforesaid facts and circumstances, in the Tribunal’s opinion, the appellant herein is entitled to payment of interest @ 12% per annum for the period after three months till the refund was granted after passing of the order by the Tribunal on 2-5-2008. The questions, referred to above, were answered accordingly.
Decision:- Appeal disposed of.
Comment:-The gist of the case is that the assessee applied for the refund of pre-deposit and the refund was delayed. The C.B.E. & C. circular provides that in case of order favouring assessee, refund of pre-deposit is required to be made within three months from order’s date, without assessee filing a formal application. If refund is not granted within three months, interest becomes payable from date of order. Since, the Tribunal’s order was passed on 2-5-2008, the assessee is entitled for interest from said date.  As regards rate of interest, in view of judgment of Apex Court in 2005 (179) E.L.T. 15 (S.C.), interest is payable @ 12% as per Section 11BB of Central Excise Act, 1944.
 
Prepared by:- Praniti Lalwani

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com