Punjab and Haryana High Court: The Division Bench of Ajay Tewari and Pankaj Jain, JJ., contemplated the appeal where the interest on refund of excise duty was rejected by the authorities. The main question before the Court was whether the assessee was entitled to interest.
Factual Matrix of the case:
- The assessee had registered office in Sonepat and applied for central excise duty along with interest before Deputy Commissioner, Central Excise, (Panipat) in 2017, eventually, the refund was sanctioned however claim w.r.t. interest was rejected.
- An appeal was filed before the Commissioner of Central Excise, (Panchkula) against the rejection of interest, which was dismissed in 2018.
- Again an appeal was filed before CESTAT, (Chandigarh), the decision of CESTAT was in favour of the assessee and he was entitled to interest on delayed refund from the date of deposit till its realization. An application was forwarded regarding the said claim.
- While the application of the Assessee was pending before the authorities, the Commissioner of CGST and Central Excise, (Panchkula) filed rectification of mistakes application before the CESTAT.
- The rectification application was dismissed in 2021.
- Hence, the present appeal is filed by the Revenue i.e. Commissioner of Central Excise (Panchkula) against the orders passed by CESTAT, (Chandigarh).
Revenue Authority questioned the change of jurisdiction of the Authorities after the new CGST regime. It was contended that the assessee has impleaded wrong authorities for the claim of refund and interest as after the new regime from June 2017, division Sonepat was brought within the jurisdiction of Rohtak Commissionerate. Hence the proper authority would have been Rohtak.
Another contention of the Revenue Authority was that the tribunal has erred in granting interest as per the amended provisions of Section 35FF of the Central Excise Act, 1944.
The Court rejected the contention of the Revenue Authority in the light of Section 142 of CGST Act, 2017. The Court held that, “Section 142 of the Act when read with Section 2(48) of the Act is a complete answer to the plea raised by the appellant qua the issue of jurisdiction.” The Court observed that the Sec explicitly provides that every claim of refund shall be dealt under the existing law i.e. Central Excise Act, 1944 and not by the provisions of the Act. Thus the plea of transfer of jurisdiction due to GST regime is not available to the appellant.
Further adjudicating whether the claim of interest was justified, the Court relied upon the judgment of Supreme Court in Sandvik Asia Ltd v. CIT, (2006) 2 SCC 508, where the Supreme Court answered that the Act provided for payment of compensation for delayed payment of amounts due to an assessee in case where the amounts included the interest and the appellant was entitled to interest u/Ss. 244 and 244-A of the Income Tax Act, 1961.
The Court applied the law laid down in Sandvik Asia Ltd in the case of the present assessee and dismissed the instant appeal. [Commissioner of Central Excise, Panchkula v. Rabi Textiles Ltd. CEA No.8 of 2022 (O&M), decided on 14-03-2022]
Mr. Sourah Goel, Senior Standing Counsel and Mr. Tej Bahadur, Advocate for the appellant.