2005 (11) TMI 425 - AT - Central Excise

Summary

Issues:
Claim for payment of interest on redemption fine refunded.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai involved a claim for payment of interest on a redemption fine refunded to the appellants. The appellants, Vijay Industries & Projects Ltd., had paid a redemption fine of Rs. 1 lakh under protest on 19-2-1992, which was later refunded to them after their case was decided in their favor by the Tribunal. The issue at hand was the rejection of their claim for interest on the refunded redemption fine by the Commissioner (Appeals).

The learned Advocate representing the appellants referred to relevant case laws to support their claim for interest payment. The case of CCE, Hyderabad v. I.T.C. Ltd. highlighted a draft Circular of C.B.E.C. proposing payment of interest on delayed refunds beyond 3 months. Additionally, the case of Eastern Coils Private Ltd. v. CCE, Kolkata-1 emphasized that when an amount is to be refunded by an appellate authority or Tribunal, the governmental authority should not refund the same without interest. The Advocate also presented Circular No. 802/35/2004-CX issued by C.B.E.C., which supported the appellants' claim for interest.

The Joint Commissioner of Central Excise and Customs informed the Tribunal about a stay granted by the Hon'ble Supreme Court in a related case, which led to a stay on the payment of interest. However, the Tribunal found the information provided incomplete and insufficient to determine the applicability of the stay on the interest payment in the present case. After examining the case record and considering the arguments from both sides, the Tribunal held that the appellants' claim for interest was legally valid. The Tribunal relied on the case laws cited by the appellants and the Board's Circular to direct that interest be granted to the appellants as per the prescribed procedure. Consequently, the appeal was allowed, and the appellants were granted the interest on the refunded redemption fine.

In conclusion, the Appellate Tribunal CESTAT, Mumbai ruled in favor of the appellants, directing the payment of interest on the redemption fine refunded to them. The decision was based on legal principles, relevant case laws, and the Circular issued by C.B.E.C., ensuring that the appellants received the interest as per the prescribed procedure.