2003 (12) TMI 519 - AT - Central Excise

Summary

Issues:
1. Denial of interest on refund claims under Section 11BB of the Central Excise Act.

Analysis:
1. The appellants made pre-deposits under Section 35F of the Central Excise Act in two appeals against demands of duty. Upon success in their appeals, they applied for a refund of Rs. 42 lakhs. The Assistant Commissioner sanctioned the refund but ordered an adjustment towards pending arrears of Central Excise duty. The Commissioner (Appeals) later directed the refund to the appellants but denied their claim for interest on the amount.

2. Another refund claim of Rs. 44,08,420/- was filed by the same party arising from a Supreme Court order excluding secondary packing costs from assessable value. The claim was initially rejected due to unjust enrichment, but the Commissioner (Appeals) allowed cash refund without interest. The present appeal was solely against the denial of interest on this claim.

3. The impugned order stated that interest is payable on duty ordered to be refunded, not on pre-deposits. The appellants had earlier communicated their decision not to claim interest on delay in settlement of refund claims. The appellants argued for interest citing relevant case law, while the Departmental Representative (DR) contended that the Tribunal lacked inherent power to grant interest where not expressly provided by law.

4. The Tribunal examined whether denial of interest was justified. Section 11BB allows interest on delayed duty refunds, including pre-deposits under Section 35F. The appellants' letter explicitly waived their right to claim interest, which is a statutory right capable of being waived. Citing a Supreme Court ruling, intentional abandonment of a right requires full knowledge, which was evident in the appellants' case. The letter demonstrated a conscious decision to relinquish interest claims, leading to the dismissal of the appeal.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal provisions applied, and the Tribunal's reasoning in arriving at the decision to dismiss the appeal regarding the denial of interest on the refund claims.