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2004 (1) TMI 471 - AT - Central ExciseRefund of pre-deposit - Interest - Relevant date - Precedent - conflict between High Court and Tribunal decisions on payment of interest - HELD THAT - According to ld. Consultant, the interest should be reckoned from 6-12-1999, the date on which this Tribunal passed the Final Order in Appeal No. E/1723/98-B. According to ld. DR, no interest is payable for any period prior to the date of receipt of the Final Order by the party. In the first place, I am bound by the view taken by the Tribunal s Larger Bench in Mira Silk Mills 2003 (3) TMI 142 - CEGAT, NEW DELHI . Where there is conflict between the law laid down by a High Court and the ratio of any decision of the Tribunal, on a given issue, the High Court s decision will prevail over the decision of the Tribunal s Bench of whatever constitution. A conflict pertaining to the relevant date for payment of interest on an amount pre-deposited u/s 35F and later on refunded to the assessee upon their success in appeal, has been brought out in the instant case. It is also pertinent to note that both the High Courts passed the respective judgments when Section 11BB was in force. The Tribunal s Larger Bench decision in Garlon Poly Fab Industries 2003 (5) TMI 84 - CEGAT, NEW DELHI , which held the provisions of Section 11BB to be applicable to claim of refund of Section 35F deposit and, accordingly, allowed interest from the date of expiry of 3 months from the date of application for refund, is apparently in conflict with the view taken by the High Court in Suvidhe 1996 (2) TMI 136 - BOMBAY HIGH COURT as upheld by the Apex Court 1996 (8) TMI 521 - SC ORDER . Following the principle stated by the Larger Bench in Mira Silk Mills 2003 (3) TMI 142 - CEGAT, NEW DELHI , I have to choose the High Court s view in preference to the Tribunal s. Accordingly, I hold that interest is liable to be paid to the appellants from 6-12-1999, the date on which the Tribunal allowed their earlier appeal. It shall be paid @ 12% in terms of the Hon ble Supreme Court s decision in Kuil Fireworks Industries v. C.C.E., 1997 (9) TMI 105 - SUPREME COURT . The impugned order is set aside to the extent it denies interest, and the present appeal is allowed. The original authority is directed to effect payment of interest to the appellants in terms of this order within 3 months.
Issues: Denial of interest on pre-deposited amount under Section 35F, conflict between High Court and Tribunal decisions on payment of interest.
Summary: The appellants were denied interest on an amount pre-deposited under Section 35F of the Central Excise Act, which was eventually refunded after their appeal was decided in their favor. The claim for interest from the date of deposit was rejected by the original authority and upheld by the Commissioner (Appeals), leading to the present appeal by the assessee seeking interest on the amount from the date of deposit. The ld. Consultant for the appellants argued that interest should be paid from the date of the Tribunal's Final Order in the appeal, citing conflicting views between High Court and Tribunal decisions. The High Court's decision in Suvidhe Ltd. case held that Section 11B was not applicable to a claim for refund of a pre-deposit under Section 35F, and thus, interest should be paid from the date of the Tribunal's Final Order. On the other hand, the ld. DR referred to the decision in Sharda Synthetics case, which held that interest should be paid from the date of expiry of 3 months after the Tribunal's order. However, the Tribunal's Larger Bench decision in Mira Silk Mills favored the High Court's ruling, stating that interest should be paid from the date of the Tribunal's Final Order. Considering the conflicting views, the Tribunal held that interest is payable to the appellants from the date of the Tribunal's Final Order, in line with the High Court's decision. The appellants were directed to receive interest at a rate of 12% as per the Supreme Court's decision in Kuil Fireworks Industries case. The impugned order denying interest was set aside, and the appellants were granted payment of interest within 3 months.
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