2013 (9) TMI 1018 - HC - Central Excise

Interest on refund claim - Delay in refund claim - Held that - As far as prayer for payment of interest from the date of deposit i.e. 8th August 2008 is concerned there is no statutory provision for payment of interest from the said date and the statutory provision i.e. Section 35FF permits interest only from the date of expiry of three months from the date of communication of appellate order to the department. The second prayer in the writ petition is for direction to pay interest @ 12% per annum from the date of pre-deposit of 55 lacs. As noticed above the constitutional validity of Section 35FF of the Central Excise Act has not been challenged - Decided against assessee.

Summary

Issues:
1. Granting relief for payment of interest on refund.
2. Examination of systematic problems in the service of orders by the Tribunal.
3. Interpretation of Section 35FF of the Central Excise Act regarding interest on refund.
4. Quashing of the Tribunal's order rejecting the rectification application for interest payment.
5. Statutory provisions for payment of interest from the date of deposit.

Analysis:
1. The High Court examined the affidavit and found that the Tribunal's order was received by the adjudicating authority along with the challan evidencing pre-deposit. Since the petitioner did not specify when they received the final order, the court concluded that no relief could be granted for interest payment on the refund.

2. The Court directed that a copy of the order be communicated to the Registrar of Customs, Excise, and Service Tax Appellate Tribunal to assess any systematic issues and the need for improvements in the prompt service of orders by the Tribunal.

3. Regarding the pre-deposit made by the petitioner, the court noted that the refund was made in accordance with the law, and interest on the refund was governed by Section 35FF of the Act. As the refund was timely, no interest was payable. The petitioner did not challenge the constitutional validity of Section 35FF, which only allows interest from the expiry of three months from the communication of the appellate order.

4. The petitioner sought to quash the Tribunal's order rejecting the rectification application for interest payment. The Tribunal held that interest was only payable as per Section 35FF, and any claims for interest had to be made to the Assistant/Deputy Commissioner. The court found no statutory provision for interest payment from the date of deposit, dismissing the prayer for interest from that date.

5. The writ petition also requested direction for interest payment at 12% per annum from the date of pre-deposit. Since the constitutional validity of Section 35FF was not challenged, the court dismissed the petition, emphasizing that interest was only payable as per the statutory provision.