2008 (9) TMI 6 - SC - Central Excise

Interest on refund - against the order passed by the Assistant Commissioner of denying interest assessee not filed the statutory appeal but had moved the High Court directly by way of a writ petition- impugned appeal by dept. is against sanction of interest by HC assessee is directed to file appeal before Commissioner (A) - if the appeal is filed within the stipulated period the said appeal will be decided on merits and that the Revenue will not raise any objection with regard to limitation

Summary

Issues:
Refund claims under Rule 57AC(7) of Central Excise Rules, 1944; Admissibility of interest on refund; Failure to file statutory appeal against order denying interest; Jurisdiction of High Court in granting interest on refund.

Analysis:
The case involved the filing of three refund claims by M/s. Sterlite Industries (India) Ltd. under Rule 57AC(7) of Central Excise Rules, 1944, for Assessment Years 2001-02 and 2002-03. The Gujarat High Court had directed the Department to refund a specific amount with interest, which led to a dispute regarding the admissibility of interest on the refund. The Assistant Commissioner of Central Excise denied the interest, a decision not challenged by the respondent in appeal. Instead, the respondent directly approached the High Court seeking a direction for the payment of interest. This raised the issue of whether the respondent should have filed a statutory appeal against the order denying interest before approaching the High Court.

The Supreme Court noted that the respondent had bypassed the statutory appeal process and moved the High Court directly by way of a writ petition. After arguments, the respondent agreed to withdraw the writ petition and file a statutory appeal before the Commissioner (Appeals) within a specified period. The Court granted permission for this withdrawal, setting aside the High Court's judgment and giving the respondent time to file the appeal. Both parties were allowed to present their legal contentions before the Appellate Authority, ensuring a fair hearing. The Solicitor General assured that the Department would not object to the appeal on grounds of limitation if filed within the stipulated period. The Appellate Authority was directed to decide the matter independently, disregarding the observations made in the High Court's judgments.

In conclusion, the Civil Appeal was dismissed as withdrawn after the respondent agreed to follow the proper appeal process. The judgment highlighted the importance of adhering to statutory procedures and ensuring a fair opportunity for both parties to present their arguments before the appropriate appellate authority.