2005 (4) TMI 422 - AT - Central Excise

Summary

Issues involved:
Interest on delayed payment of refund - Date from which interest is available.

Analysis:
The appeal in question pertains to M/s. Mansinghka Oil Mills Ltd. The primary issue revolves around determining the availability of interest on delayed payment of refund, specifically whether it should be calculated from the date the refund claim was filed (14-10-92) or from the date authorized by the Commissioner (Appeals) (27-8-95).

Upon hearing arguments from both sides, it was highlighted that the department had initially demanded CESS on solvent oil from the Appellants, a demand that was later overturned by the Tribunal on 14-10-92. The Appellants contended that interest on the refund should be paid from the date of the Tribunal's decision. However, it was clarified that the provision for interest due to delays in refunding Central Excise duty was introduced in the Central Excise Act on 26-5-1995 under Section 11BB.

The Proviso to Section 11BB stipulates that interest is payable if the refund is not granted within 3 months of the Finance Bill, 1995 receiving presidential assent. Since the Finance Bill received assent on 26-5-1995, and the refund was not sanctioned within 3 months from this date, the Commissioner (Appeals) rightfully ordered the payment of interest from 27-8-1995. Consequently, the interest on the delayed refund was correctly calculated from the date specified in the legislation, rather than the date of the original refund claim.

In conclusion, the appeal filed by the Appellants was dismissed, affirming the decision of the Commissioner (Appeals) to calculate interest on the delayed refund from 27-8-1995 in accordance with the provisions of Section 11BB of the Central Excise Act.