2007 (5) TMI 470 - AT - Central Excise

Summary

Issues: Determination of rate of interest for the period between 1990-1995

In this case, the primary issue revolves around the determination of the rate of interest for the period between 1990-1995 when no statutory rate was fixed. The Commissioner (Appeals) had initially adopted a rate of 10% based on a decision of the Hon'ble High Court of Kolkata. However, the appellant argued for a rate not less than 15% citing decisions from other High Courts. The dispute centered on whether a higher rate was justified based on the nature of the default by the department.

Analysis:

The Commissioner (Appeals) carefully reviewed the case records and submissions by the appellants. The appellant contended for a rate not less than 15% based on decisions from the Hon'ble High Courts of Gujarat, Madras, and Bombay, which had granted interest rates ranging from 12% to 18% depending on the circumstances of each case. However, the adjudicating authority had already followed a 2005 decision of the Hon'ble High Court of Kolkata and set the rate at 10%. The Commissioner noted that no specific reason was provided for allowing a higher rate than what was already determined by the adjudicating authority.

Upon hearing the learned JDR and considering the citations provided by the appellant, the Tribunal observed that other High Courts had indeed granted interest rates in the range of 12% to 18%. Despite this, the Tribunal mentioned that as a practice, they had been fixing the interest rate at 12% based on various judgments. Consequently, the Tribunal accepted the appellant's prayer for fixing the interest rate at 12% and allowed the appeal on this term, providing consequential relief.

In conclusion, the Tribunal's decision resolved the issue by accepting the appellant's request to fix the interest rate at 12% based on the precedents set by various High Courts, despite the initial determination by the adjudicating authority and the Commissioner (Appeals) at a lower rate.