Venkateswara Non-ferrous Vs. the Commissioner of Customs and - Court Judgment

Excerpt:
1. this appeal has been filed against order-in-appeal no. 75/2004 ce dated 28.10.2004 passed by the commissioner of customs and central excise (appeals-ii), hyderabad.2. the issue relates to claim of interest on grounds of inordinate delay in the refund of amount due to the appellants. this appeal has a very checkered history. the appellants availed modvat credit on aluminium waste and scraps. revenue proceeded against the appellants and disallowed the modvat credit to the tune of rs. 11,45,468/- vide the following orders, (i) oio no. 4/92 dated 10.1.1992; (ii) oio no.8/92 dated 27.2.1992 and (iii) oio no. 20/93 dated 3.3.1993 on the ground that the m/s. apsrtc and m/s. apseb from whom the wastes and scrap was purchased are not manufacturers and hence, the scrap was not generated during the course of manufacture. the appellants paid the duty demanded under protest even in 1993. they were not successful before the commissioner (a), however, the cegat madras in its final order no. 1008/1996 dated 31.5.1996 allowed the appeals by way of remand to the original authority. even though the tribunal's order is dated 31.5.1996, the de novo adjudication was taken up only on 9.10.2002 and decided on 28.4.2003. this time also the appellants were not successful. the appellants approached the commissioner (a) who in his order dated 6.2.2004 allowed the appeals with consequential relief.consequent to the above mentioned appellate order dated 6.2.2004, refund claim was preferred and the ac in his order 27.5.2004 sanctioned the refund but the claim of the appellants for interest was rejected in an order dated 13.7.2004. aggrieved by the above mentioned order dated 13.7.2004, the appellants approached the commissioner (a) who passed the impugned order dated 28.10.2004. the appellants are highly aggrieved over the impugned order. hence they have come before this tribunal for relief.3. shri g. natarajan, learned advocate appeared for the appellants and shri anil kumar, learned jdr for the revenue.4. the learned advocate pointed out that they have been agitating this issue right from the year 1992 and the tribunal allowed their appeal by way of remand in 1996 and the department has taken more than six years to conduct the de novo proceedings. therefore, they are entitled for the interest from the date of decision of the tribunal that is from 31.5.1996. further, he pointed out that even after commencing the denovo proceedings, the department took another six months to decide the issue afresh, the demand was once again confirmed. all through this period of more than six years, the department without any authority of law kept the amount paid by the appellants. the learned advocate relied on the following case laws.motor industries co. ltd. v. cc, chennai the learned advocate emphasized the point that amount paid during the dispute should be treated as pre-deposit in the light of various decisions of the tribunals/courts. once such payments are recognized as pre-deposits, the same should have been refunded. he further relied on cbec circular no. 802/35/3004 dated 8.12.2004.5. the learned departmental representative urged that only in the year 2004 the issue reached finality and therefore the appellants cannot claim interest with effect from 1996 as contended by them. therefore, the impugned order is legal and proper.6. we have gone through the records of the case carefully. the appellants have claimed interest on the refund amount with effect from 31.5.1996, which is the date of cegat's order remanding the matter to the original authority. the commissioner (a) in the impugned order has held that the issue reached finality only on 6.2.2004 and after the above mentioned order granting relief to the appellants, the refund was promptly given by the department. hence, he has held that the appellants are not entitled for any interest. no doubt the commissioner (a) has taken a legalistic stand on the issue. even though the cegat's order of 1996 has not given full relief, the issue was remanded to the original authority to consider the issue in the light of the bombay collectorate's trade notice. instead of expeditious disposal, the department has taken six years to commence the de novo proceedings.there is enormous delay in taking up the de novo proceedings. is no one in the department responsible for monitoring the expeditious disposal of remand matters? there is a hierarchy of officers headed by chief commissioner of central excise. the chief commissioner has a large number of commissioners under him who are assisted by additional commissioners and joint commissioners. the fact that a de novo matter is taken up after a lapse of six years from the date of cegat's order shows that the machinery of supervision has completely broken down and gone haywire. all the supervisory officers had abdicated their responsibilities. in the second round of litigation after the remand order, the department took the same stand as in the original proceedings to deny the modvat credit. the commissioner (a) in her order dated 6.2.2004 has elaborately gone through the facts of the case and has held that the appellants had been denied the facility of deemed credit by illogical application of assumed views. this order of the commissioner (a) has been accepted by the department and has resulted in refund of the amount erroneously recovered from the appellants in the year 1993. a scrutiny of the records of the case reveals that at every stage the revenue officers played safe and rejected claim of the appellants. a tendency to avoid taking decisions in the light of law out of fear is easily discernible. in fact the appellants' money has been with the department right from the year 1993 for the simple reason that revenue officers are loath to take responsibility. revenue could have settled the matter in favour of the appellant at least within three months from the date of cegat's decision dated 31.5.1996. the appellants should not suffer on account of sheer lethargy of the department. the prayer of the appellant for demand of interest is not unreasonable. therefore, in facts and circumstances of this case, we order that interest should be granted from three months after the date of cegat's order dated 31.5.1996 till the date of payment of refund amount. thus, we allow the appeal.(operative portion of this order was pronounced in open court on conclusion of hearing)

Judgment:
1. This appeal has been filed against Order-in-Appeal No. 75/2004 CE dated 28.10.2004 passed by the Commissioner of Customs and Central Excise (Appeals-II), Hyderabad.

2. The issue relates to claim of interest on grounds of inordinate delay in the refund of amount due to the appellants. This appeal has a very checkered history. The appellants availed modvat credit on aluminium waste and scraps. Revenue proceeded against the appellants and disallowed the modvat credit to the tune of Rs. 11,45,468/- vide the following orders, (i) OIO No. 4/92 dated 10.1.1992; (ii) OIO No.8/92 dated 27.2.1992 and (iii) OIO No. 20/93 dated 3.3.1993 on the ground that the M/s. APSRTC and M/s. APSEB from whom the wastes and scrap was purchased are not manufacturers and hence, the scrap was not generated during the course of manufacture. The appellants paid the duty demanded under protest even in 1993. They were not successful before the Commissioner (A), however, the CEGAT Madras in its Final Order No. 1008/1996 dated 31.5.1996 allowed the appeals by way of remand to the Original Authority. Even though the Tribunal's order is dated 31.5.1996, the de novo adjudication was taken up only on 9.10.2002 and decided on 28.4.2003. This time also the appellants were not successful. The appellants approached the Commissioner (A) who in his order dated 6.2.2004 allowed the appeals with consequential relief.

Consequent to the above mentioned appellate order dated 6.2.2004, refund claim was preferred and the AC in his order 27.5.2004 sanctioned the refund but the claim of the appellants for interest was rejected in an order dated 13.7.2004. Aggrieved by the above mentioned order dated 13.7.2004, the appellants approached the Commissioner (A) who passed the impugned order dated 28.10.2004. The appellants are highly aggrieved over the impugned order. Hence they have come before this Tribunal for relief.

3. Shri G. Natarajan, learned advocate appeared for the appellants and Shri Anil Kumar, learned JDR for the Revenue.

4. The learned advocate pointed out that they have been agitating this issue right from the year 1992 and the Tribunal allowed their appeal by way of remand in 1996 and the department has taken more than six years to conduct the de novo proceedings. Therefore, they are entitled for the interest from the date of decision of the Tribunal that is from 31.5.1996. Further, he pointed out that even after commencing the denovo proceedings, the department took another six months to decide the issue afresh, the demand was once again confirmed. All through this period of more than six years, the department without any authority of law kept the amount paid by the appellants. The learned advocate relied on the following case laws.Motor Industries Co. Ltd. v. CC, Chennai The learned advocate emphasized the point that amount paid during the dispute should be treated as pre-deposit in the light of various decisions of the Tribunals/Courts. Once such payments are recognized as pre-deposits, the same should have been refunded. He further relied on CBEC Circular No. 802/35/3004 dated 8.12.2004.

5. The learned Departmental representative urged that only in the year 2004 the issue reached finality and therefore the appellants cannot claim interest with effect from 1996 as contended by them. Therefore, the impugned order is legal and proper.

6. We have gone through the records of the case carefully. The appellants have claimed interest on the refund amount with effect from 31.5.1996, which is the date of CEGAT's order remanding the matter to the Original Authority. The Commissioner (A) in the impugned order has held that the issue reached finality only on 6.2.2004 and after the above mentioned order granting relief to the appellants, the refund was promptly given by the department. Hence, he has held that the appellants are not entitled for any interest. No doubt the Commissioner (A) has taken a legalistic stand on the issue. Even though the CEGAT's order of 1996 has not given full relief, the issue was remanded to the Original Authority to consider the issue in the light of the Bombay Collectorate's Trade Notice. Instead of expeditious disposal, the department has taken six years to commence the de novo proceedings.

There is enormous delay in taking up the de novo proceedings. Is no one in the department responsible for monitoring the expeditious disposal of remand matters? There is a hierarchy of officers headed by Chief Commissioner of Central Excise. The Chief Commissioner has a large number of Commissioners under him who are assisted by Additional Commissioners and Joint Commissioners. The fact that a de novo matter is taken up after a lapse of six years from the date of CEGAT's order shows that the machinery of supervision has completely broken down and gone haywire. All the supervisory officers had abdicated their responsibilities. In the second round of litigation after the remand order, the department took the same stand as in the original proceedings to deny the modvat credit. The Commissioner (A) in her order dated 6.2.2004 has elaborately gone through the facts of the case and has held that the appellants had been denied the facility of deemed credit by illogical application of assumed views. This order of the Commissioner (A) has been accepted by the department and has resulted in refund of the amount erroneously recovered from the appellants in the year 1993. A scrutiny of the records of the case reveals that at every stage the Revenue officers played safe and rejected claim of the appellants. A tendency to avoid taking decisions in the light of law out of fear is easily discernible. In fact the appellants' money has been with the department right from the year 1993 for the simple reason that Revenue officers are loath to take responsibility. Revenue could have settled the matter in favour of the appellant at least within three months from the date of CEGAT's decision dated 31.5.1996. The appellants should not suffer on account of sheer lethargy of the department. The prayer of the appellant for demand of interest is not unreasonable. Therefore, in facts and circumstances of this case, we order that interest should be granted from three months after the date of CEGAT's order dated 31.5.1996 till the date of payment of refund amount. Thus, we allow the appeal.

(Operative portion of this Order was pronounced in open court on conclusion of hearing)