SURBHI ENTERPRISE Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellants in the present appeal were engaged conversion of hot rolled patta/patti into cold rolled patta/patti, which was considered as amounting to manufacture and consequently a demand of Rs. 50,084/ - was raised against them. The appellants paid Rs. 21,990/ - against the above demand during the course of investigation. The goods were lying in the factory valued at Rs. 12,40,848/ - were also seized which were confiscated by the Assistant Commissioner but since the goods were provisionally released earlier on payment of security deposit and execution of B -ll bond for Rs. 2,00,000/ -, the amount of Rs. 2,00,000/ - was appropriated towards confiscation. The demand of Rs. 50,084/ -was confirmed by the Deputy Commissioner who also imposed a penalty of equal amount under Section 11AC and demanded interest on the duty. The matter went up to the Tribunal and the process undertaken by the appellants was held not amounting to manufacture and accordingly not liable to duty. The appellants have therefore claimed refund of duty paid by them amounting to Rs. 50,084/ -out of Rs. 21,990/ - which was paid by them before issue of show cause notice and the balance Rs. 28,094/ - was paid as pre -deposit during the pendency of their appeal before the Commissioner (A). The refund was sanctioned to them but the claim of interest on the refund amount was rejected on the ground that the duty was not paid under protest.

(2.) LD . Advocate for the appellants submits that entire amount of Rs. 2,69,032/ - which comprises of Rs. 2 lakhs as cash security in lieu of confiscation, Rs. 21,990/ - as duty paid before issue of show cause notice, Rs. 28,094/ - as pre -deposit of duty paid before filing appeal with the Commissioner (Appeals) and Rs. 18,948/ - as interest on the fixed deposit of Rs. 2 lakh deposited by them as cash security which was also adjusted as duty. The Commissioner (Appeals) has however rejected the claim for interest on the ground that duty was not paid under protest. It is the appellants contention that since the show cause notice issued for recovery of duty was decided and appeal was filed before the Tribunal, the payment has to be considered as the payment under protest. In support there of he cited the decision of the CEGAT in the case of Nepa Ltd. v. Commissioner of Central Excise, Indore and CESTAT decision in the case of Commissioner of Central Excise, Chennai II v. Rane Brake Linings Ltd. in which it has been held that duty paid by filing an appeal before Commissioner (Appeals) to contest the adjudication order is payment of duty under protest. Similarly, in the case of Manik Machinery Mfrs. Pvt. Ltd. v. Commissioner of Central Excise, Mumbai it was held that duty being paid during pendency of appeal has to be deemed to be payment under protest.

(3.) HEARD both sides.