2014 (7) TMI 266 - AT - Central Excise

Interest - Delayed refund of pre-deposit amount - Held that - deposited amount is required to be refunded within three months from the date of the order - Final order of the Tribunal in favour of the Appellant was passed on 09.09.2008. Thus, the amount deposited by the Appellant earlier in 2002, is required to be refunded within three months from the date of the said order. Consequenlty, the Appellant is entitled to interest after expiry of three months from the date of the order, which apparently is the date of communication of the order to the department being pronounced in the presence of the departmental representative. Following decision of Commissioner of Central Excise, Indore vs. Kamdeep Marketing Pvt. Ltd. 2010 (12) TMI 278 - CESTAT, DELHI Matter is remanded to the adjudicating authority only for the limited purpose of calculating the interest amount on the number of days delay after expiry of the period of three months from the date of order of the Tribunal, till the sanction of refund to the Appellant. The adjudicating authority is directed to determine the interest at the appropriate rate following the provisions of section 35FF read with section 11BB of Central Excise Act, 1944 - Decided in favour of assessee.

Summary

Issues:
- Claim for interest on refunded amount
- Interpretation of provisions under Central Excise Act, 1944
- Application of Section 35FF and 11BB

Analysis:

Claim for Interest on Refunded Amount:
The case involved an appeal regarding the refund of a deposited amount by the Appellant, with a claim for interest on the refunded sum. The Appellant had initially deposited a specific amount as directed by the Additional Commissioner, which was later refunded following a favorable decision by the Tribunal. The Appellant sought interest on the refunded amount from the date of deposit until the actual refund date. The issue revolved around the entitlement of the Appellant to such interest.

Interpretation of Provisions under Central Excise Act, 1944:
The Appellant argued that since they were not liable to pay any duty but deposited the amount as per the department's directive, interest should be paid from the date of payment until the refund. The Revenue contended that interest should be calculated from the expiry of three months from the date of filing the refund claim. The Tribunal analyzed the legal provisions and precedents to determine the correct interpretation of the law in this context.

Application of Section 35FF and 11BB:
The Tribunal referred to Section 35FF of the Central Excise Act, 1944, which specifies the interest on delayed refunds of deposited amounts. It highlighted that the deposited amount must be refunded within three months from the final order date. Citing relevant judgments, the Tribunal concluded that the Appellant was entitled to interest after the expiry of three months from the date of the Tribunal's order. The decision emphasized the necessity for the adjudicating authority to calculate and refund the interest amount promptly, in line with the provisions of Section 35FF and Section 11BB.

In the final judgment, the Tribunal set aside the Order-in-Appeal and remanded the matter to the adjudicating authority for the calculation of interest on the delayed refund. The authority was directed to determine the interest amount following the applicable legal provisions within a specified timeline. The decision partially allowed the appeal, ensuring the Appellant's entitlement to interest on the refunded amount as per the statutory provisions.