The Deputy Commissioner of Central GST allowed the GST Refund to Chadha Brass in compliance with the CESTAT order.
The party, M/s Chadha Brass Ltd, Compound Chadha filed a refund claim amounting to Rs.11462128/- in division office on 18.02.2019, on account of CESTAT’S Final Order No. 71712/2018 dated 01.08.2018, passed by Hon’ble CESTAT, Allahabad against OIA No. 281-CE/MRT 11/2011 dated 30.06.2011, passed by the Commissioner, Customs, Central Excise and Service Tax (Appeals), Meerut-II.
The party is engaged in manufacturing trimmed/untrimmed sheets, circles of Copper and Brass intended to be used in the manufacture of Handicrafts or Utensils. They filed a refund claim of duty amounting to Rs.1,14,62,128/- on 27.01.2009, which was paid by them under protest for the period from 12.04.2004 to 09.11.2008 on their final product i.e. trimmed/untrimmed sheets, circles of Copper and Brass intended to be used in the manufacture of Handicrafts or Utensils. The said duty was paid under protest claiming that they were entitled for exemption of duty on the said final product under Sl. No. 181 and 141 respectively of Notification No. 06 of 2002-CE dated 01.03.2002 and 05/2006-CE dated 01.03.2006. The above said refund claim was rejected by the Deputy Commissioner Central Excise Division Moradabad vide OIO No. R/07/DC/MBD/2011 dated 28.02.2011.
The CESTAT Allahabad allowed the party’s appeal stating that “we hold that the said refund was admissible to the appellant”. The said refund claim amounting to Rs. 1,14,62,128/- was sanctioned to the party in compliance of Hon’ble CESTAT’s Final Order. However, vide the said OIO dated 28.05.2019, interest was not granted to the said party.
The Commissioner (Appeals). has allowed the appeal with consequential relief by holding that interest was allowed to the party as per Section 11BB of Central Excise Act’1944, from the expiry of a period of three months from the date of receipt of the application i.e. 27.01.2009 till the payment of refund.
However, the refund of Rs.3,91,911/ was sanctioned and paid to the party, and the party preferred to appeal against the said Order. After receipt of the Order-in-Appeal, the subject SCN was issued in confirmation of principles of natural justice and was issued in tandem with the observations made earlier during the pre-audit of the claim. It is a settled legal position that issuance of SCN is an exercise in extension of the principles of natural justice and issuance thereof is no reason to conclude that the refund claim of interest was to be rejected.
The Deputy Commissioner Central GST Division Moradabad found that a refund of Rs.391911/- (@6% from 01.11.2018) had already been paid to the party and the Commissioner (Appeals) has ordered for payment of the interest as per the provisions of Section 11BB of the Act, from the date of receipt of the application i.e. 27.01.2009. Accordingly, the interest of three months from the date of filing of refund application starts from after 90 days from 27.04.2009 in terms of Section BB of the Central Excise Act, 1944, rate of interest has been fixed at 6% per annum vide Notification No. 67/2003-CE (N.T) dated 12.09.2003.
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