[Order]. - After a visit to the premises of the appellant’s company on 2-11-1996 an offence case was registered and proceedings were initiated to demand duty on the basis of consumption of anti static yarn oil during the period from December 1994 to October 1996. Immediately on the day of the visit of the officers itself, the appellant company had deposited an amount of Rs. 3,95,000/- towards duty. On 30-4-1997, the appellant filed a refund claim seeking refund of the amount deposited in view of the fact that no show cause notice had been issued to them till the date and therefore the amount deposited was to be refunded. However, this refund claim was returned as premature since the proceedings were not completed. Thereafter a show cause notice was issued on 22-9-1999 and in the proceedings the original adjudicating authority confirmed the duty demand with interest and imposed penalty. The appeal filed against this order was allowed by the Commissioner (Appeals) vide his Order-in-Appeal dated 15-9-2004. This order has attained finality since no appeal has been filed against this decision.
2. The issue of refund once again became a matter of dispute which was settled by the order of the Commissioner (Appeals) dated 1-10-2008 whereby he held that appellant is eligible for refund of the amount of Rs. 3,95,000/- in cash. He also held that there was no decision of the original adjudicating authority regarding interest and therefore he left it to the original adjudicating authority to decide the same. Consequent to this order, the appellant filed a letter on 22-10-2008 and thereafter the principal amount of Rs. 3,95,000/- was sanctioned vide Order-in-Original dated 26-2-2009. Thereafter the appellant wrote another letter on 3-3-2009 seeking interest on the amount paid by them after three months from the date of application i.e. 30-4-1997. The original adjudicating authority allowed interest of Rs. 99,605/- taking a view that the appellant is eligible for interest from the date after three months from the date of order of the Commissioner (Appeals) i.e. 16-9-2004. The appellant is before me seeking interest for the period from 1-8-1997 to 15-12-2004.
3. The learned counsel on behalf of the appellants submitted that in this case the amount was deposited on the date of the visit of the officers because of coercion. No proceedings were initiated till the application for refund was filed. The proceedings were initiated in 1999 which culminated in dropping of the proceedings ultimately. Therefore the amount deposited by the appellant was neither duty nor pre-deposit and was simply an amount illegally collected without authority of law by the department. Therefore as per the ratio of the decision of the Tribunal in the case of Binjrajka Steel Tubes Ltd. v. CCE, Hyderabad reported in (Tri.-Bang.) = (Tri.-Bang.), the appellant is eligible for interest from the date of payment of duty to the date of actual payment of refund @ as specified under Section 11BB of Central Excise Act, 1944. In the case of Omjai Bhavani Silk Mills (P) Ltd. v. CCE & S.T., Hyderabad reported in (Tri.-Bang.) also similar view was taken and it was held that interest is payable from the date of deposit till the date of payment. As an alternative submission, the learned counsel submitted that even if it is held that refund was not admissible in view of the confirmation of demand by the original adjudicating authority by his order issued on 24-11-2000, the appellant still be eligible for refund for the period prior to the date of Order-in-Original since only after passing the Order-in-Original, the amount deposited by the appellant, would acquire the nature of pre-deposit in terms of Section 35F of Central Excise Act, 1944.
4. The learned AR on behalf of the Revenue relies upon the logic adopted by the learned Commissioner (Appeals) in his order and submits that the application filed by the appellant on 30-4-1997 was premature and the refund became eligible only after that Commissioner (Appeals) passed order on 15-9-2004. Therefore the appellant has already been paid interest in accordance with statute and no more amount is due. In reply to a query of the Bench as to whether there are any contrary decisions to the two decisions submitted by the learned counsel, the learned AR fairly stated that he does not have any contrary decisions to cite. Further, he also left it to the Bench to decide when he was asked whether he would like some time for studying the issue and to find out whether there are any contrary decisions on the same issue. Since the learned AR has left the decision as to whether he needs time to find out contrary decisions also to the Bench, I consider it appropriate that the final decision can be taken today itself.
5. I have considered the submissions made by the learned counsel on behalf of the appellant. The two decisions cited by the learned counsel are in my opinion covering the issue involved in this case also. In the case of Binjrajka Steel Tubes Ltd., appellants were availing the benefit of exemption Notification No. 1/93-C.E. dated 28-2-1993 and the officers when they visited informed the appellant that since the unit was registered with DGTD, benefit of SSI exemption was not available and they were compelled to pay an amount of Rs. 6,25,000 on 9-5-1994. Ultimately the matter reached the Tribunal and the Tribunal allowed the appeal on 11-10-2002. The refund claim filed by the assessee was allowed only to the extent of principal which again became a subject matter of litigation and came up before the Tribunal and Tribunal took the view in that case from the date of collection till the date upto which the amount was with the government interest is payable. Relying upon the decision of the Hon’ble High Court of Gujarat in the case of Vijay Textile v. UOI reported in 1979 (4) E.L.T. (J181) (Guj.), the Tribunal took the view that excise authorities had collected the amount as tax without the authority of law and therefore interest should be paid from the date of collection till the date of actual repayments. The Tribunal also relied upon the decision of the Hon’ble High Court of Kolkata in the case of East Anglia Plastics (I) Ltd. reported in (Kolkata). In the case of Omjai Bhavani Silk Mills (P) Ltd., an amount of Rs. 4 lakh was deposited by the assessee on 27-1-1997 on the direction of the Revenue in the course of some investigation. In that case the original adjudicating authority itself dropped the proceedings on 31-3-2000 and thereafter appellants claimed a refund which was ultimately refunded on 7-11-2006 without interest. The Tribunal took the view that interest is payable from the date of deposit. In that case also it was held that the amount deposited on 27-1-1997 was without any authority of law and therefore interest is payable and Tribunal also citied the decision in the case of Binjrajka Steel Tubes Ltd. In view of the above two decisions, the appellant is eligible for interest as per the provisions of Section 11BB of Central Excise Act, 1944 from the date after three months from the date of filing the refund claim since in this case a refund claim had been filed by the appellants after depositing the amount. Accordingly, I hold that appellant is eligible for interest from 1-8-1997 to 15-12-2004.
(Dictated & Pronounced in Court)