Page 115 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] ARIHANT TILES & MARBLES PVT. LTD. v. COMMISSIONER (APPEALS), JODHPUR 73
charge sequence of three amounts also Rs. 18,45,273/-, Rs. 8,29,314/- &
Rs. 4,27,681/- respectively to the appellant as interest.
2.3 To assail the said order, the appellant filed an appeal before Com-
missioner (Appeals), Jodhpur who vide Order-in-Appeal No. 1129-1131, dated
11-10-2018 (impugned order), observed the following :-
1. There is no provision for interest on interest.
2. Notification No. 67/2003-C.E. (N.T.), dated 12-9-2003, prescribes 6%
interest rate per annum for the purpose of Section 11BB of the Excise
Act, therefore Appellant is not eligible to interest beyond the statu-
tory 6% interest on delayed payment of refund claims.
Being aggrieved of this order appellant is before this Tribunal.
3. I have heard Mr. Narender Singhvi, Learned Advocate for the appel-
lant and Mr. K. Poddar, Learned Authorised Representative for the Department.
It is submitted on behalf of appellant that in furtherance of the order of
CESTAT dated 9th January, 2015, the appellant became entitled for the interest
w.e.f. the year 2008-09, but it could get sanctioned, only in the year 2018. The de-
lay of more than 10 years for getting the amount of interest refunded entitles the
appellant to be compensated for the same. It is impressed upon that interest is
compensatory in nature, therefore, interest on delayed sanction of interest is
payable. Learned Counsel has relied upon the decision of Hon’ble Supreme
Court in the case of Sandvik Asia Ltd. v. CIT reported as 2006 (196) E.L.T. 257
(S.C.) and that the ratio has not [been] disapproved by Hon’ble Larger Bench in
Gujarat Fluoro Chemicals v. CIT reported as 2008 (300) ITR 328 (Guj.).
3.1 It is submitted that the said decision has not been overruled rather
has been relied upon by Supreme Court in a subsequent decision in the case of
CIT v. Gujarat Fluoro Chemicals itself. Even the Division Bench of Gujarat, after the
matter was referred back by the Supreme Court, is of the opinion that there is
general principle for awarding compensation to the assessee for the delay in re-
ceiving interest properly due to it. It is alleged that the Appellate Authority be-
low has ignored the said decisions rather the order-under-challenge suffer from
gross misinterpretation of these decisions. Learned Counsel has also placed reli-
ance upon the decision of State of Gujarat v. Unjha Pharmacy reported as 2016
(341) E.L.T. 211 (Gujarat) wherein the decision of Gujarat Fluoro (supra) has been
followed holding that compensation for prolonged delay in sanction of interest
has to be granted.
3.2 In alternative submission, it has been submitted that when principal
amount is payable with interest, payment made by the department is to be first
adjusted towards the interest and thereafter towards the principal amount. Thus,
to the extent of short fall in refund of principal amount after first appropriating
the sanctioned amount towards interest, the liability of Revenue to grant interest
still stands. Learned Counsel has relied upon the decision in the case of V. Kala
Bharathi and Ors. v. Oriental Ins. Co. Ltd. reported as AIR 2014 (S.C.) 1563, decision
of Industrial Credit and Development Syndicate v. Smithaben H. Patel & Ors. reported
as AIR 1999 (SC) 1036 have been relied upon by the appellant. Finally, impress-
ing upon that on the delayed sanction of refund of interest on 6th July, 2018, the
appellant is entitled to interest in the terms of Section 11BB for the period from
28-9-2009 to 6-7-2018. Therefore, the order challenge is prayed to be set aside and
three of the appeals are prayed to be allowed.
4. While rebutting these arguments, Learned D.R. has submitted that
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