2012 (9) TMI 114 - AT - Customs

Interest on refund - refund claim was admitted and sanctioned to the appellant but was credited to Consumer Welfare Fund - Held that - As the reckoning of the period for the purpose of payment of interest under Section 11BB of the Act is concerned the liability of the revenue to pay interest commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) and not on the expiry of the said period from the date on which order of refund is made - Thus the appellant is eligible for the interest from three months after the date of filing of the refund application till the amount of refund is sanctioned to him - in favour of assessee.

Summary

Issues:
Grant of interest on refund claim credited to Consumer Welfare Fund.

Analysis:
The appeal was filed against the rejection of the appellant's claim for interest on the refund amount credited to the Consumer Welfare Fund. The Counsel for the appellant argued that the appellant was eligible for the refund claim, as confirmed by a previous Tribunal decision. The issue was whether interest should be granted from the date of filing the refund claim or three months after a specific date. The Counsel cited a Supreme Court judgment in support of the appellant's position.

The departmental representative contended that the case at hand was different from the one cited by the appellant and referred to a High Court judgment to support their argument. The Tribunal examined the submissions and found that the first appellate authority had rejected the appeal based on the timeline of events leading to the refund claim being credited to the Consumer Welfare Fund. The department had taken timely action on the refund application, and the amount was transferred to the fund during the litigation period.

The Tribunal noted that the refund claim was eventually sanctioned to the appellant after the Tribunal's decision in their favor. Referring to the Supreme Court judgment cited by the appellant, the Tribunal concluded that the appellant was entitled to interest from three months after the filing of the refund application until the refund amount was sanctioned. The Tribunal held that the Supreme Court's decision was applicable in this case, and therefore, the appellant was eligible for interest on the refund claim. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.