2008 (7) TMI 193 - AT - Central Excise

Commissioner allowed the claim for interest on refund because of delay from the date immediately after expiry of three months from the date of receipt of the order of the Tribunal till the date of actual payment of refund appellant states that the interest should be paid from the date of payment - held that interest has to be allowed as per statutory provisions only - interest on delayed refunds have to be considered us/ 11B & 11BB Commissioner s order upheld assessee s appeal rejected

Summary

Issues:
Applicability of interest on refund and the date from which interest is payable.

Analysis:
The case involved a dispute over the applicability of interest on a refund and the date from which the interest should be paid to the appellant. The appellant had paid duty and penalty, which were later set aside by the Tribunal. The appellant then filed a refund claim, which was sanctioned but appropriated against outstanding government dues. The main issue was whether interest should be paid from the date of payment by the appellant or from a later date as per the decision of the Commissioner (Appeals).

The appellant argued that interest should be paid from the date of payment, citing the decision of the Hon'ble Supreme Court in Sandvik Asia Ltd. case. The Revenue contended that interest is payable only after the matter is finally decided by the Tribunal and the refund claim is filed as per the Tribunal's order. The Commissioner (Appeals) held that interest is payable from a date after three months from the date of receipt of the final order of the Tribunal.

The Tribunal analyzed the legal provisions under Section 11B and Section 11BB of the Central Excise Act. It noted that a refund is granted only after an application is made, and there is no concept of suo motu refund. Section 11BB deals with interest on delayed refunds and specifies the conditions for interest payment. The Tribunal emphasized that interest is payable only if the refund is not paid within three months from the date of the application.

The Tribunal referred to various judicial decisions cited by the appellant, including Sandvik Asia Ltd., Kuil Fireworks Industries case, and judgments related to statutory provisions governing refunds and interest payments. It concluded that the appellant's claim for interest from the date of payment was not valid as per the statutory provisions. The Tribunal upheld the decision of the Commissioner (Appeals) that interest is payable from a date after three months from the date of the Tribunal's order, as per the legal framework provided under the Central Excise Act.

In conclusion, the Tribunal rejected the appeal filed by the party, emphasizing that the statutory provisions regarding refunds and interest payments must be adhered to. The judgment was pronounced on 17-7-2008, providing a detailed analysis of the legal framework and judicial precedents relevant to the issue at hand.