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Jai Bhawani Concast Pvt. Ltd. Vs. Commissioner of Central Excise & Central Goods and Service Tax - (Customs, Excise and Service Tax Appellate Tribunal) (27 Sep 2022)

Any amount deposited during investigation has to be treated as pre-deposit and the same is neither hit by limitation nor by unjust enrichment



The issue involved in present appeal is whether the Court below have erred in reducing the amount of refund, which was in the nature of pre- deposit, and further whether interest have been rightly allowed under Section 35FF of the Central Excise Act, 1944.

Learned Commissioner (Appeals) vide common order-in-appeal held that, the refund of Rs. 8 lakhs have been rightly granted, however, refund of Rs. 50,000 was held to be time barred and also hit by unjust enrichment, by observing that though the amount has not been paid against invoices, but he finds that raising invoices and collecting the amount of duty is not the only way to pass on the burden. As regards, interest under Section 35FF, it has been held that the Appellant is entitled to interest only on the amount, which was required to be deposited in terms of section 35F of the Act, at the time of filing of the appeal. Further, observing that as the remaining amount of refund has been sanctioned within the stipulated time, no interest is payable thereon. Being aggrieved the appellant is before present tribunal.

Madras High Court in the case of CCE vs Pricol Ltd have held that any amount deposited during investigation has to be treated as pre-deposit and the same is neither hit by limitation nor by the clause of unjust enrichment for the purpose of refund. Similar view has been taken by Hon'ble Allahabad High Court in CCE vs Eveready Industries Ltd and also by Hon'ble Gujarat High Court in the case of Principal Commissioner of Customs vs. H.V. Ceramics.

The learned Commissioner (Appeals) have erred in holding that the amount of Rs. 50,000 is hit by limitation and unjust enrichment, and further interest is not payable under Section 35FF of the Act.

The Appellant is entitled to refund of the balance amount of Rs. 50,000 which was deposited on 30th January 2003. Further, Appellant is entitled to interest on the full amount of Rs. 8.5 lakhs from the date of deposit till the date of refund @ of 12% per annum under the provisions of Section 35FF of the Act. The Adjudicating Authority is directed to grant the balance refund, as well as the interest within a period of 60 days. Appeal allowed.


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