2008 (1) TMI 740 - AT - Central Excise

Summary

Issues involved: Refund claim, payment of interest on delayed refund, pre-deposit of duty/penalty, entitlement to interest u/s 11BB of the Central Excise Act, 1944.

The judgment pertains to a case where the respondent filed refund claims following orders in their favor by the Commissioner (Appeals), debiting duty/penalty at their own which was later appropriated by the department. The main contention was the payment of interest on delayed refund, with the Adjudicating Authority sanctioning the refund but not allowing interest. The Commissioner (Appeals) granted interest after three months from the date of the refund application, leading to an appeal by the revenue. The issue of pre-deposit by the respondent was also raised.

Upon hearing the learned DR and examining the records, it was observed that the respondent had indeed deposited the amount as a pre-deposit against pending appeals, as per the decision of the Hon'ble Supreme Court in a relevant case. The Supreme Court had ruled that interest should be paid at 12% per annum after three months from the date of the order favoring the party. A circular issued by the CBEC further clarified that pre-deposit must be returned within three months from the date of the order passed by the Appellate Tribunal or Courts, unless there is a stay of the order. Consequently, the respondent was deemed entitled to payment of interest after three months from the disposal of the order by the Commissioner (Appeals), leading to a modification of the impugned order and disposal of all appeals accordingly.