2007 (1) TMI 411 - AT - Central Excise

Summary

Issues:
Appeal against rejection of refund claim and interest on the refund.

Analysis:
The appeal was filed against the rejection of the appellant's refund claim by the Commissioner (Appeals) in response to the Assistant Commissioner's order sanctioning a refund of Rs. 5 lakhs. The Assistant Commissioner had rejected the claim for interest on the refund, citing two grounds: first, the original TR-6 challan was not submitted by the appellants until 5-4-2005, and second, interest is only due when the dispute is finally settled. The Commissioner (Appeals) upheld this decision, noting that the department's appeal against the original order was still pending before the Tribunal and the proof of deposit was only furnished on 5-4-2005.

The primary issue revolved around the entitlement to interest on the refunded amount. The Assistant Commissioner had based the rejection of interest on the grounds that the original TR-6 challan was not submitted in time and that interest is payable only after the final settlement of the dispute. The Commissioner (Appeals) concurred with this decision, emphasizing that interest becomes due only after the final order of the Tribunal on the department's appeal against the original order. This deferred the decision on interest payment until the final resolution of the dispute.

Furthermore, the judgment highlighted the importance of providing proof of deposit at the appropriate time. It was noted that if the show cause notice indicated payment during the investigation, the Department could not contest the late submission of the TR-6 challan as proof of deposit. The judgment emphasized the need for a fresh examination of the proof of deposit when considering the issue in the future.

In conclusion, the appeal was deemed not maintainable, and the rejection of the appeal was upheld with the observations and directions provided in the judgment. The decision to defer the consideration of interest payment until the final resolution of the dispute by the Tribunal was a significant aspect of the ruling, emphasizing the procedural and substantive requirements for claiming interest on refunded amounts in such cases.