2003 (11) TMI 426 - AT - Central Excise

Summary

Issues:
1. Entitlement to interest on delayed refund of pre-deposit.
2. Applicability of interest from the date of the final order or a later date.

Analysis:

Issue 1: Entitlement to Interest on Delayed Refund of Pre-deposit
The primary issue in these appeals was whether the appellant is entitled to interest on the delayed refund of pre-deposit made by them. The department contended that since pre-deposit is not the duty itself, the appellant is not entitled to interest under Section 11BB. Conversely, the appellant argued that they are entitled to interest even on pre-deposit amounts. The appellant relied on legal precedents such as the decision of the Madras High Court in CCE v. Calcutta Chemical Co. Ltd. and various decisions of the Tribunal, including CCE, Mumbai v. Reliance Industries Ltd. and Bharat Heavy Electricals Ltd. v. CCE, Meerut. The Tribunal referred to the decision in Sheela Foam Pvt. Ltd. v. CCE, Noida, where it was held that the assessee is entitled to claim interest on delayed refund of pre-deposit. The Tribunal concluded that the appellant is indeed entitled to interest on the delayed refund of the pre-deposit amount.

Issue 2: Applicability of Interest from the Date of the Final Order or a Later Date
The next issue to be determined was the starting point for calculating the interest on the delayed refund. The Tribunal, based on the decision in Sheela Foam Ltd. v. CCE, Noida, directed that interest should be payable from the date of expiry of three months from the date of receipt of the Final Order of the Tribunal. Although the Revenue argued that Section 11BB was not directly applicable, the Tribunal found that the principles contained therein could be applied. As the appellants had submitted refund applications on specific dates, they were entitled to interest from the date of expiry of three months from those dates until the date of refund at the rate of 12%. Consequently, the orders in question were set aside to the extent mentioned, and the appeals were partly allowed.

In conclusion, the Tribunal ruled in favor of the appellant, establishing their entitlement to interest on the delayed refund of pre-deposit amounts and determining the appropriate starting point for the calculation of interest based on legal principles and precedents cited during the proceedings.