2008 (6) TMI 512 - AT - Central Excise

Summary

Issues:
1. Whether interest for delayed refund can be given before the insertion of Section 11BB of the Central Excise Act, 1944.
2. Whether interest on interest is liable to be paid by the Revenue.

Analysis:
1. The Tribunal addressed the first issue concerning the entitlement to interest for delayed refund before the enactment of Section 11BB of the Central Excise Act, 1944. The Commissioner (Appeals) had granted interest in accordance with Section 11BB effective from 26-5-95, while the appellant claimed entitlement to interest from 1991-92. The Tribunal emphasized that prior to the insertion of Section 11BB, there was no provision in the Central Excise Act for the payment of interest. Consequently, the Tribunal upheld the Commissioner (Appeals) decision to grant interest only after the expiry of three months from 26-5-95, i.e., from 26-8-95, based on the statutory limitations. Therefore, the appeal was dismissed on this ground.

2. The second issue revolved around the payment of interest on interest. The appellants relied on a Tribunal decision in a specific case, but the Tribunal highlighted that this decision had not been endorsed by the Larger Bench in another case. The Tribunal cited the decision in the case of Sun Pharmaceuticals Industries Ltd., which concluded that interest on delayed payment of interest is not permissible under the Central Excise Act. The Tribunal further emphasized that a decision cited by the appellants did not consider the authoritative ruling of the Larger Bench. Consequently, the Tribunal found no merit in the appeal and rejected it accordingly.

In conclusion, the Tribunal's judgment clarified the issues regarding the payment of interest for delayed refunds and interest on interest. It underscored the statutory limitations and precedents set by authoritative decisions, ultimately leading to the dismissal of the appeal. The judgment was pronounced openly on 26-6-2008.