2018 (1) TMI 360 - AT - Central Excise

Entitlement of interest - relevant date - Held that - The interest liability of Revenue would start from the expiry of three months period from the date of filing of refund claim and would get over only with the actual claim having been given to the assessee - as the said refund claim was adjusted against the confirmed demand which was already stayed by the Tribunal, admittedly the said action of the adjudicating authority was with an intention to delay the handing over the refund to the assessee. The Assistant Commissioner to pass afresh order - appeal allowed by way of remand.

Summary

Issues:
1. Adjustment of refund against an outstanding confirmed demand without actually giving the refund to the assessee.
2. Dispute regarding interest claim from the date of sanction of the refund claim to the actual handing over of the amount.

Analysis:
1. The appellant applied for a refund of rebate, which was sanctioned but adjusted against an outstanding confirmed demand by the original adjudicating authority. The appellant contended that the confirmed demand was already stayed by the Tribunal, making the adjustment unjust. The Commissioner (Appeals) set aside the adjustment, leading to the Revenue refunding the amount to the appellant. The Tribunal found the action of the adjudicating authority to be with the intention of delaying the refund, and directed a fresh order to be passed considering the appellant's arguments and relevant decisions cited.

2. The dispute in the appeal centered around the interest claim from the date of sanction of the refund claim to the actual payment. The appellate authority held that since the refund was sanctioned within 3 months of the application, interest liability did not arise. However, the appellant argued that interest should be paid until the amount was actually handed over, citing various Tribunal decisions and a High Court decision. The Tribunal agreed with the appellant, stating that the interest liability of the Revenue would start after 3 months from the refund claim filing and continue until the actual payment to the assessee. The Tribunal emphasized that officers cannot evade responsibility by merely passing orders on paper and highlighted the intention behind the delayed refund to the assessee.

3. The Tribunal's decision was based on the principle that interest should be paid until the actual refund is given to the assessee, especially in cases where the refund was wrongly adjusted against a stayed demand. The judgment emphasized the importance of upholding the rights of the appellant and ensuring that the adjudicating authority acts in accordance with the law. The appellant was granted the opportunity to present their case before the adjudicating authority for a fresh order in line with the Tribunal's observations and relevant legal precedents cited during the appeal proceedings.