Jindal Drugs Limited Vs Commissioner of Central Excise (CESTAT Mumbai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, dismissed the appeal challenging the Commissioner (Appeals)’ order denying interest on the refund of a pre-deposit made under the Central Excise Act, 1944.
The appellant, engaged in the manufacture of cocoa powder and cocoa butter, had deposited ₹4 crore on 21.04.2014 pursuant to an order of the Bombay High Court directing it to deposit the amount in cash and furnish a bank guarantee of ₹9.40 crore while granting stay and remanding the matter to the Tribunal. Subsequently, by Final Order dated 16.04.2015, the Tribunal decided the substantive dispute in favour of the appellant, holding that the process undertaken in respect of cocoa butter received from its Jammu factory amounted to manufacture under the Central Excise law. The Tribunal also held that the appellant was entitled to CENVAT credit of central excise duty paid on inputs received from its Jammu factory and eligible for rebate of central excise duty, where applicable, on export of final products.
Following the Tribunal’s decision, the Deputy Commissioner sanctioned a refund of ₹4,27,74,795 through Order-in-Original dated 18.06.2015. The refund comprised the ₹4 crore pre-deposit and interest of ₹27,74,795 calculated at 6%.
