Kanpur Edibles Pvt. Ltd Vs Commissioner of Central Excise & & CGST (CESTAT Allahabad)
The appeal arose from an order of the Commissioner (Appeals), Allahabad, affirming an Order-in-Original that sanctioned refund of central excise duty paid under protest but rejected the claim for interest. The appellant, a manufacturer of refined vegetable oils, had claimed exemption from central excise duty on fatty acids and residues generated during manufacture. Revenue disputed the exemption and issued repeated show cause notices, following which the appellant deposited duty under protest without passing on its incidence to customers. Earlier proceedings concerning the dispute were ultimately decided in the appellant’s favour by the Tribunal, and the Revenue accepted those decisions. Thereafter, proceedings for subsequent periods were also dropped, leading the appellant to file a refund claim under Section 11B of the Central Excise Act, 1944. The refund was sanctioned, but interest was denied.
Before the Tribunal, the appellant contended that the amount deposited under protest was not “duty” but a “revenue deposit” and therefore interest should be granted from the date of deposit until the date of refund. It relied on Article 265 of the Constitution, Section 72 of the Indian Contract Act, 1872, CBEC Circular no. 984/08/2014-CX dated September 16, 2014, and judicial precedents to argue that the Department had retained money without legal authority and that the appellant was entitled to restitution. The appellant also argued that there had been delay in processing the refund application and sought interest both from the date of deposit and for the alleged delay in granting the refund.
