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2017 (5) TMI 864 - HC - CustomsEntitlement to interest - relevant date for calculation of interest - refund of pre-deposit - whether the petitioner is entitled to get interest at the rate of 12% per annum on refund of pre-deposit of ₹ 1,15,15,214/- granted to the petitioner after the expiry of three months from the date of the order passed by the appellate Tribunal that is 18.11.2002 till the date of actual refund along with further interest on the delayed payment of interest? - Held that - the petitioner is entitled to get refund of the amount within a period of three months of the disposal of the appeals in the assessee s favor - the manner in which the refund of the money to be made is clear from the notifications ie. within three months of the disposal of the appeals in assessee s favour. Therefore, respondents are liable to refund the amount on expiry of three months from 18.11.2002 to the petitioner ie. the date of the order of the Appellate Tribunal, even if the application was submitted at a later point of time, especially due to the fact that the notifications are not restricting the payment of interest from the date of submission of application. What will be the rate of interest that the petitioner is entitled to get? - Held that - in the case of Kuil Fire Works Industries v. Collector of Central of Excise 1997 (9) TMI 105 - SUPREME COURT OF INDIA , it was held that, the pre-deposit made by the assessee was directed to be returned to him with 12% interest - the interest that is liable to be paid by the respondents is fixed at 12% per annum. Petition allowed - decided in favor of petitioner.
Issues Involved:
1. Entitlement to interest on refund of pre-deposit. 2. Rate of applicable interest on the refund. Detailed Analysis: 1. Entitlement to Interest on Refund of Pre-Deposit: The petitioner, a private limited company, sought interest on a pre-deposit of ?1,15,15,214/- made under protest during an appeal process. The appellate Tribunal ruled in favor of the petitioner on 18.11.2002, and the Supreme Court dismissed the Revenue's appeal on 28.07.2015, directing the refund of the excess duty paid. The petitioner claimed interest from the expiry of three months post the Tribunal's order until the actual refund date. The respondents argued that interest was only due from three months post the Supreme Court's order, as the petitioner applied for the refund only after this date. The court noted that the relevant notifications (dated 02.01.2002 and 08.12.2004) mandated the refund of pre-deposits within three months of the appellate Tribunal's favorable order, regardless of when the refund application was submitted. Thus, the petitioner was entitled to interest from three months after the Tribunal's order (18.11.2002). 2. Rate of Applicable Interest: The petitioner claimed interest at 12% per annum, citing the Supreme Court's decision in Commissioner of Central Excise v. ITC Limited [2005 (179) E.L.T. 15 (S.C.)], which directed payment of 12% interest on delayed refunds. The respondents contended that the applicable interest rate was 6% per annum, as per the notification dated 12.09.2003. The court referred to the Supreme Court's judgment in ITC Limited, which set a precedent for awarding 12% interest on delayed refunds. Other relevant judgments, including Kuil Fire Works Industries v. Collector of Central of Excise [1997 (95) ELT 3 (SC)] and Madura Coats Pvt. Ltd. v. Commissioner of C. Ex., Kolkata – IV [2012 (285) E.L.T. 188 (Cal.)], were also considered, reinforcing the 12% interest rate. The court concluded that the petitioner was entitled to 12% interest per annum from the expiry of three months post the Tribunal's order. Conclusion: The court directed the respondents to pay the petitioner interest at 12% per annum from three months after 18.11.2002 until the refund date, adjusting any interest already paid, within one month from the judgment date. The writ petition was disposed of accordingly.
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