Order date: 27 September 2022

Facts

• The appellant, M/s Sona Plastic udyog, engaged in manufacture of plastic items. A search was conducted by the Anti-evasion Branch of Central Excise Commissionerate, Jaipur and observed the evasion of Central Excise Duty. 
• The confiscation of the goods as were seized at the time of search was also ordered while giving an option to pay the redemption fine so as to get the goods released. The appellant paid the said redemption fine on 25.01.2018. Challenging the said order that an appeal was filed along with deposit.
• The appellant filed a refund claim for the said amount of pre-deposit along with the aforesaid amount of redemption fine. The said refund claim was partly allowed sanctioning the refund of both the amounts i.e. the amount of pre-deposit with interest of Rs.91,787/- and the amount of redemption fine but without interest. Earlier this Tribunal vide its final order of 8th January, 2020 had allowed the appeal granting all consequential benefits to the appellant. 
• As against this Respondent submit that as per section 11A (ec) if the refund claim is not sanctioned within 3 months of the date of its application, the interest on the said amount has to be paid by the Department. But in this case refund has been sanctioned before 3 months Hence, no question of sanctioning any interest at all arises.

 Issue

• Whether the appellant can claim interest accrued on redemption fine ?

Order

• The Tribunal observed that it is clear that since the order of confiscation of goods has already been set aside the amount of redemption fine as was deposited by the appellant was an amount of revenue deposit with the department.
• The Tribunal relied upon the decision made by Banglaore bench on CCE, Nasik vs. Motor Industries Ltd. reported as [2006 (205)ELT 274 (Tri-Bang)] and M/s. Parle Agro Pvt. Ltd. Vs. Commissioner, GST [2021-TIOL-306-CEST-ALL] Since the entire amount as was proposed to be recovered from the appellant was got deposited even prior to the issuance of Show Cause Notice and since the said demands stand already set aside vide the order of this Tribunal, it stands clear that the said amount was not the liability of the appellant to be deposited i.e. it was not the amount of duty. Hence section 11B of Central Excise Act creating the notion of three months as impressed upon by learned Departmental Representative, is not applicable to the facts of present case.
• The amount which stands deposited since 06.07.2012 has been kept with the department with no authority for retaining the same. The Tribunal also kept reliance on decision of Hon’ble High Court of Madras in the case of Calcutta Iron and Steel Co. Vs CESTAT, Chennai reported as [2017 350 ELT 327 (Mad)], and the Hon’ble Apex Court on Sandvik Asia Ltd. reported as [2006 (196) ELT 257 (SC)] holding the assessee is entitled for interest along with the refund of the amount which he was not liable to pay to the department.
• It also observed that as per the decision of Hon’ble High Court of Kerala in the case of Sony Pictures Networks India Pvt. Ltd. vs Union of India reported as [2017 (353) E.L.T. 179 (Ker.)] the interest rate would be 15% p.a via Notification No.68/2003-CE dated 12.09.2003 as issued under Section 11DD 
•  Hence, it hold the appellant to be entitled for the interest on the refunded amount (the redemption fine) to be paid from the date of its deposit at the rate of 15% per annum. 
• Hence the impugned order is set aside and the appeal stands allowed.