2007 (3) TMI 526 - AT - Central Excise

Summary

Issues:
1. Payment of interest on account of delayed payment of refund.

Analysis:
1. E/709/2005:
- The appellant availed Modvat credit on Teflon Coated Glass Belt, which was denied, leading to a refund claim. The Assistant Commissioner's order for reversal was remanded by the Commissioner (Appeals), and the appellant filed a refund claim. The refund was allowed but without interest. The issue was the department's illegal holding of the amount from 4-12-1997 to 22-3-1999, despite conflicting orders. The CEGAT allowed the appeal with consequential relief. The appellant was entitled to interest for this period. The refund was granted within three months of filing the claim, showing no delay. The department was directed to pay appropriate interest for the period mentioned.

2. E/708/2005:
- The appellant claimed Modvat credit on Teflon Coated Fabric Belt, which was denied, and the credit was repaid. The claim for refund was rejected on technical grounds, leading to a series of appeals and rejections. The appellant eventually received the refund but without interest. The department argued that the appellant was not entitled to the credit due to the goods being received before the Modvat scheme on capital goods came into effect. The Commissioner (Appeals) rejected the appeal for interest, stating there was no delay in granting the refund. The Tribunal doubted the appellant's entitlement to the credit and consequent refund due to the goods being received before the scheme's introduction. Therefore, no interest was granted, considering the appellant's benefit from the Modvat credit on goods received before the scheme's implementation.

In conclusion, the Tribunal granted interest to the appellant in the first case due to the department's illegal holding of the refund amount. However, in the second case, no interest was granted as the appellant's entitlement to the credit and refund was questioned based on the timing of goods receipt in relation to the Modvat scheme's introduction.