KUMAR INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE, CALICUT

JUDGEMENT

(1.) THIS appeal has been filed against the Order -in -Appeal No. 209/2003 -C.E., dated 8 -7 -2003, passed by the Commissioner of Customs & Central Excise (Appeals), Cochin. In the impugned order, the Commissioner (Appeals) has upheld the Order -in -Original No. 25/2003/REFUND dated 28 -4 -2003, passed by the Assistant Commissioner rejecting the claim of the appellants for interest of Rs. 8,71,165/ - from 8 -6 -1987 till 10 -6 -2002.

(2.) SHRI E.K. Madhavan, learned Advocate appeared for the appellants and Shri R. N. Viswanath, learned SDR appeared for the Revenue.

(3.) THE learned Advocate made the following submissions : - The chronology of events leading to the claim of interest is as follows : - DateEvents 19 -12 -1986Order -in -Appeal passed by the Collector (Appeals), Madras allowing appeal holding Mamooties, Pick Axes are not liable to duty. 27 -5 -1987Submitted claim for refund of Rs. 14,08,913.82 paid as duty on the above goods for the period from 1 -3 -1986 - 18 -3 -1987. Though the Assistant Collector sanctioned the entire amount, he withheld an amount of Rs. 8,73,620.27 out of total sanctioned amount of Rs. 14,08,913.82 towards possible payment of less charge demand on RT 12 for the months of March 1986 to June 1986 on some other goods. 1 -6 -1987The Assistant Collector issued cheque for balance amount of Rs. 5,35,291/ - 12 -7 -1996CEGAT, New Delhi order Nos. E/290 -298/96 -B1 [1996 (87) E.L.T. 172 (Tribunal)] held that demand far less charge raised on RT 12 is invalid and set aside the orders of the authorities below. 13 -12 -1996The appellants claimed the refund of the withheld amount of Rs. 8,73,620.27 31 -1 -1997The Assistant Commissioner paid the withheld amount. But the Department issued a show cause notice for recovery of erroneous refund. 24 -8 -1998The Assistant Commissioner confirmed the demand and ordered for crediting the amount under Section 12AC of the Act. 19 -11 -1998The appellant paid the amount of Rs. 8,73,620.27 21 -4 -2001Order -in -Appeal No 208/2002 -C.E., passed by The Commissioner (Appeals) remanding the matter to the Original authority to examine unjust enrichment. 3 -4 -2002Order -in -Original No. 38/2002 passed after the remand by Deputy Commissioner of Central Excise. The sanctioning and releasing the amount of Rs. 8,71,165/ - 10 -6 -2002The above amount was paid to the appellants. 5 -9 -2002The appellants submitted claim for interest on Rs. 8,71,165/ - at the rate of 18% from 8 -6 -1987 till 10 -6 -2002. 28 -4 -2003Order -in -Original No. 25/2003/REFUND, passed by the Assistant Commissioner rejecting the claim dated 5th September 2002. 8 -7 -2003Order -in -Appeal No. 209/2003 passed by the Commissioner (Appeals) rejecting the appeal. The learned Advocate strongly contended that the original claim for refund in respect of Mamooties and Pick Axes is finally settled in January 1987. A part of the refund was withheld by the Department on 8 -9 -1987 and the withheld part was refunded on 8 -3 -2002. In view of these indisputable facts, it is not correct to say that the disputed part of the original refund claim was settled as per the Order dated 3 -4 -2002. It is submitted that an amount of Rs. 8,71,165/ - was found due and payable to the appellants in June 1987 but was actually paid on 10 -6 -2002 due to the illegal and arbitrary action of the Department. Therefore, the learned Advocate prayed for allowing the appeal by granting interest @ 18% for the period from 8 -6 -1997 till 10 -6 -2002.