STEEL STRIPS LTD. Vs. CCE

JUDGEMENT

(1.) These are two appeals, arising out of a common Order -in -Appeal No. 514/03 dated 19.9.03 - - one by M/s. Steel Strips Ltd. and other by the Revenue.

(2.) Shri K.K. Anand, learned Advocate, submitted that M/s. Steel Strips Ltd. had been undertaking the activity of cold rolling of duty paid hot rolled strips, which were contended by them as not amounting to manufacture; that the matter was finally settled by the Hon'ble Supreme Court, which had held that the Department had not been able to establish that the process undertaken by them brought into existence in new article; that they had claimed refund of the duty collected by the Department alongwith interest for the period 2.4.80 to 20.3.82; that, initially, the Assistant Commissioner rejected the refund claim and the Tribunal remanded the matter to the original authority vide Final Order No. 1457/96 -NB dated 30.5.96; that in de novo proceedings, the Deputy Commissioner sanctioned the refund claim vide order dated 26.8.99; that, however, the Deputy Commissioner declined their request of interest on the ground that provisions of Section 11BB of the Central Excise Act are not attracted; that the Commissioner (Appeals), under the impugned order, ordered that the interest is payable to M/s. Steel Strips Ltd. after three months from the date of insertion of provision regarding payment of interest i.e. with effect from 24.8.95 till the date of issuance of cheque at the rates notified under Section 11BB during the relevant period. The learned Advocate contended that they are eligible for the interest w.e.f. 2.4.80 as the amount, got deposited by them, from that date is without authority of law; that there are various judgments of the Hon'ble Courts where interest had been held to be payable in circumstances where the Department had retained deposit unlawfully and delayed refund and in the matter, even after the matter was finally decided in favour of the assessee. He relied upon the decision in the case of CCE v. Mahavir Aluminium Ltd., 2003 (57) RLT 467 (CEGAT -Mum.).

(3.) On the other hand, Shri V. Valte, learned SDR, submitted that no interest is payable by the Revenue; that as per the Explanation to Section 11BB of the Central Excise Act, where any order of refund is made by the Commissioner (Appeals), the Appellate Tribunal or any Court, against the order of the Assistant/Deputy Commissioner, the order passed by the Commissioner (Appeals), the Appellate Tribunal or Court, shall be deemed to be an order passed under Sub -Section (2) of Section 11B for the purpose of this Section; that in the present matter, the Appellate Tribunal, vide order dated 30.5,96, remanded back the case to decide the issue of unjust enrichment; that the Tribunal had not passed any order of refund within the purview of Section 11BB of the Central Act; that, therefore, the question before the Adjudicating Authority, was to decide the issue involved in the refund case and refund was admissible only after the decision of the case. As such mere direction of the Tribunal for de novo consideration, was not an order in terms of Explanation. He relied upon the decision in the case of Union of India v. Orient Enterprises, 1998 (60) ECC 482 (SC) : 1998 (99) ELT 193 (SC), wherein it has been held that interest on delayed refund was conferred for the first time by insertion of Section 27A of the Customs Act and claim for payment of interest on delayed refund for the past period cannot be maintained. Reliance has also been placed on the decision in the case of B.H.E.L. v. CCE, Meerut, 2002 (139) ELT 591 (T), wherein it has been held that interest on the amount of pre -deposit pending appeal is payable only from the date of final order in favour of the assessee as the entitlement of refund arises only when the appeal is finally disposed of. He also relied upon the decision in the case of Eastern Coils Private Ltd. v. CCE, Kolkata -I, 2003 (153) ELT 290 (Cat.) and Sheela foam Pvt. Ltd. v. CCE, Noida, 2003 (154) ELT 522 (T -LB).