2007 (12) TMI 372 - AT - Central Excise

Interest on delayed refund of pre-deposit - Held that - even if the refund of pre-deposit can be considered as refund of duty as argued by the ld. Consultant since the refund cheque dated 27-5-2000 has been issued within three months of the Appellants applying for the refund pursuant to the Tribunal s order dated 12-1-2000 entitling them to the refund there is no scope for allowing them interest on such refund made within three months from the date of application which was 28-2-2000 - appeal dismissed.

Summary

Issues:
Claim for interest on refunded amount under Section 11BB of the Central Excise Act, 1944 for pre-deposit under Section 35F.

Analysis:
The case involved a dispute regarding the entitlement to interest on a refunded amount related to a pre-deposit made under Section 35F of the Central Excise Act, 1944. The Appellants had pre-deposited an amount as directed by the Lower Appellate Authority, which was later refunded following a Tribunal order. However, the claim for interest on the refunded amount was rejected by the authorities below, leading to the appeal before the Tribunal.

The Authorities below rejected the claim for interest citing Section 11BB of the Central Excise Act, 1944, which allows interest on delayed refund of duty. They argued that since the refund in this case pertained to a pre-deposit under Section 35F, which requires pre-deposit of duty and penalty, interest was not applicable. Additionally, they contended that since the refund was granted within three months of the Appellants filing a refund claim post the Tribunal's order, there was no delay in sanctioning the refund, thus not warranting interest payment.

The Tribunal, after considering the arguments, found that even if the pre-deposit refund could be construed as a refund of duty, the refund was issued within three months of the Appellants applying for it following the Tribunal's order. As the refund was made within the stipulated period, the Tribunal concluded that there was no basis to award interest on the refunded amount. Consequently, the Tribunal dismissed the appeal, upholding the decision of the Authorities below and rejecting the claim for interest on the refunded amount.

In conclusion, the Tribunal held that the Appellants were not entitled to interest on the refunded amount related to the pre-deposit made under Section 35F of the Central Excise Act, 1944, as the refund was issued within three months of the application following the Tribunal's order. The decision of the Authorities below was upheld, and the appeal was consequently dismissed by the Tribunal.