2019 (8) TMI 1706 - AT - Central Excise

Interest from delayed refund - relevant date for calculation of interest - Section 11 BB of the Central Excise Act - HELD THAT - The refund should have been granted by the Revenue within a period of three months. Further, allowing one month for the purpose of communication of the order, it is held that the appellant is entitled to interest under Sections 35 F read with Section 35 FF and 11 BB from 10.02.2004 till the date of grant of refund being on 19.12.2016. Also, the amounts deposited even prior to adjudication / finalisation also ipso facto becomes pre-deposit under Section 35 F on filing appeal. The Adjudicating Authority is directed to grant interest at the rate applicable from time to time within a period of two months from the date of receipt of the copy of this order - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Entitlement to interest on refund under Section 11 BB of the Central Excise Act and for which period.

Analysis:
The appeal revolved around the issue of whether the appellant was entitled to interest on refund under Section 11 BB of the Central Excise Act and for which specific period. The case originated from a dispute regarding the inclusion of Freight and Insurance charges in the assessable value by the department, which was later settled in favor of the appellant by the CESTAT. The original authority, however, re-quantified the duty amount without deducting the freight and insurance charges, leading to a prolonged legal battle. The appellant had deposited various amounts on different directions, which were later claimed as part of the refund. The matter was further complicated when the Original Authority unsettled the case, resulting in a significant amount being blocked with the government. Subsequent legal proceedings culminated in a Final Order in favor of the appellant, emphasizing the incorrect actions of the Original Authority. The appellant then sought a refund of the deposited duty amount along with interest, which was partially granted by the Deputy Commissioner but denied by the Assistant Commissioner without providing any reasoning. The appellant appealed this decision before the Commissioner (Appeals), who rejected the interest claim based on specific grounds. However, the Tribunal, upon hearing the parties, held that the appellant was indeed entitled to interest under Sections 35 F, 35 FF, and 11 BB from a specified date till the grant of refund. The Tribunal also directed the Adjudicating Authority to grant interest within a designated period and allowed the appellant to approach for interest accordingly. Ultimately, the appeal was allowed in favor of the appellant based on the Tribunal's findings and directives.