2006 (1) TMI 353 - AT - Central Excise

Summary

Issues:
1. Grant of interest on excess pre-deposit.
2. Eligibility for interest from the finalization of the issue.
3. Denial of interest by the Revenue.
4. Refund of excess deposit with interest.

Analysis:
1. The appeal concerns the rejection of the appellant's prayer for interest on an excess pre-deposit of Rs. 20,57,960/- by the Commissioner (Appeals) in OIA No. 44/2005-CE. The appellants, manufacturers of Biscuits on job work basis, had been contesting the assessment issue since 1982. The final assessment was done on 3-6-2002, and the excess amount was returned to the assessee after adjusting the short-levy liability. The appellant claimed interest on the return of the deposit, which was not paid along with the amount returned, leading to the appeal for interest from 1-8-1986.

2. The appellant argued that they are eligible for interest from the finalization of the issue on 28-2-1997, as per the OIA passed by the Commissioner (Appeals). Citing the Tribunal judgment in Purvi Fabrics and Texturise (P) Ltd. v. CCE, Jaipur-II and the Supreme Court case of CCE, Hyderabad v. ITC Ltd., the appellant contended that interest should be paid on refund claims.

3. On the other hand, the Revenue relied on the findings of the Commissioner (Appeals) that there was no delay in the matter, as the adjustment of duty and refund were done after final assessments on 3-6-2002.

4. Upon careful consideration, it was noted that the appellants had deposited Rs. 40 lakhs as per interim orders by the High Court in 1983. Various orders and appeals followed, leading to the final assessment on 3-6-2002. The excess amount was refunded on that date, indicating the eligibility of the appellant for interest. The Revenue's denial of interest was deemed unjustified, and the appellant's prayer for interest on the excess amount was accepted, with the direction for interest payment within three months from the order date.

This comprehensive analysis highlights the key points and arguments presented in the judgment regarding the grant of interest on excess pre-deposit and the eligibility for interest from the finalization of the assessment issue.