2013 (12) TMI 935 - AT - Customs

Interest on the Refund sanctioned belatedly - Revenue contends that Assessee has never made a claim for interest - Commissioner (Appeals ordered for payment of interest - Held that - In case of any refund claim made, Section 11B of the Act specifically provides that any person claiming refund has to make an application. By reading these two Sections together, it becomes quite clear that the interest is required to be granted when the claim is sanctioned beyond a period of three months from the date of application. In this case, the Commissioner (Appeals) on an appeal filed by the Respondent Assessee, has allowed the interest which is admissible to them as per law - When the issue involved is settlement of refund claim, the date of filing the application is not relevant, whereas for the purpose of interest, the date of filing the application has to be taken into account. Under these circumstances, we find that the impugned order passed by the Commissioner (Appeals) is proper and correct and needs no interference - Decided against Revenue.

Summary

Issues:
- Stay of operation of the impugned Order regarding interest on Refund sanctioned belatedly.
- Claim for interest by the Assessee.
- Interpretation of Section 11AB of the Central Excise Act, 1944.
- Commissioner (Appeals) decision on granting interest.
- Relevant dates for refund claim and interest calculation.

Analysis:
The Appellate Tribunal CESTAT KOLKATA dealt with the issue of a stay of operation of an Order concerning the entitlement of an Assessee to interest on a Refund sanctioned belatedly. The Revenue sought a stay, arguing that the Assessee had never claimed interest. The Additional Commissioner for the Revenue contended that the Assessee did not make a claim for interest, and the Commissioner (Appeals) erred in ordering payment of interest. In contrast, the Counsel for the Assessee argued that they had indeed claimed interest during a personal hearing in 2004.

Upon considering the submissions, the Tribunal found the issue straightforward and proceeded to make a final decision on the Appeal rather than considering the Stay Petition. The Appeal was based on the absence of an interest claim by the Assessee before the Deputy Commissioner and the lack of mention of interest in the Order-in-Original. The Tribunal referred to Section 11AB of the Central Excise Act, 1944, which mandates the payment of interest if a refund is not made within three months from the application date. The Tribunal emphasized that Section 11AB does not require a separate application or request for interest, and interest is due when a claim is sanctioned beyond three months from the application date.

The Tribunal noted that the Assessee's refund claim, filed in December 2002, was subject to litigation until the refund was sanctioned. While the filing date of the application is irrelevant for settling the refund claim, it is crucial for calculating interest. Therefore, the Tribunal upheld the Commissioner (Appeals)' decision to grant interest to the Assessee, as it was in accordance with the law. Consequently, the Appeal by the Revenue was rejected, and both the Stay Petition by the Department and the Cross Objection by the Assessee were disposed of by the Tribunal.