2006 (11) TMI 471 - AT - Central Excise

Summary

Issues involved: Grant of interest on refund by the Commissioner (A) and the appellant's prayer for interest as well as interest on interest.

In the present case, the appellants appealed against the Order-in-Appeal rejecting their prayer for interest on the refund granted to them by the Commissioner (A). The Commissioner (A) had initially held that the amounts to be refunded should be credited to the Consumer Welfare Fund. However, following a protracted litigation, the Order-in-Original was set aside, and the amount in deposit was eventually refunded to the appellants. The appellants sought interest on the refunded amount, including interest on interest, which was not considered initially.

The issue before the Tribunal was whether the appellants were entitled to interest on the refund amount. The Tribunal referred to the decision of the Larger Bench in the case of Indian Thermoplastics (P) Ltd. v. CC, Kolkata, which established that interest is payable from the date of expiry of three months from the Final Order of the Tribunal till the date of payment. The appellants argued that they should receive interest from three months after becoming eligible for the refund, as already calculated and paid to them. They also cited a judgment from the High Court of Judicature for Rajasthan in the case of J. K. Cement Works v. ACC, which upheld the grant of interest. Additionally, they relied on a Larger Bench judgment in the case of Jayanta Glass Ltd. v. CCE, Kolkata, which emphasized that interest due to the applicant should be calculated based on their application.

Considering the precedents cited by the appellants, the Tribunal allowed their prayer for interest as well as interest on interest. The Original Authority was directed to calculate the interest and interest on interest, with payment to be made within one month from the receipt of the Tribunal's order. The appeal was allowed on these terms.