2018 (1) TMI 712 - AT - Central Excise

Interest on delayed refund - Whether the appellant are entitled to interest of the refunded amount of 2, 27, 79, 325/- from 24.04.2000 till 19.01.2004 and on the amount ofRs. 1, 80, 03, 202/- from 24.04.2000 till 01.04.2014? Held that - the appellant are entitled to interest on the pre-deposit amount after expiry of three months from the date of communication of the order-in-appeal deciding the issue in their favour i.e. from 24.04.2000 till 19.01.2004 in relation to refund amount of 2, 27, 79, 325/- from 24.04.2000 till 01.04.2014 in relation to refund amount of 1, 80, 03, 202/- as claimed by the Appellant - appeal allowed.

Summary

Issues:
Entitlement to interest on refunded amounts.

Analysis:
The appellant deposited ?5.00 Crores in compliance with a stay order and subsequently filed a refund application. The adjudicating authority sanctioned a partial refund and adjusted the balance against another demand. The appellant's claim for interest on the refunded amounts was contested by the Revenue, citing timely refund sanction. The appellant argued for interest based on Circulars and legal precedents. The key issue was whether interest was due on the refunded amounts.

The appellant contended that interest should be paid on the refunded amounts from the date of the order-in-appeal till the actual refund date. They relied on Circulars directing timely refunds and legal judgments supporting interest payment. The Revenue argued that refunds were sanctioned within the stipulated time, hence no interest was payable. The dispute centered on the interpretation of timelines for interest payment on refunded amounts.

The Tribunal analyzed the facts and legal principles. It noted that Circulars specified interest payment after three months from the order-in-appeal. Citing a High Court case, the Tribunal emphasized the entitlement to interest on refunded amounts post the specified period. Applying this precedent, the Tribunal held that the appellant was entitled to interest on the refunded amounts from the date of the order-in-appeal until the actual refund date. The impugned order was set aside, and the appeal was disposed of in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, granting them interest on the refunded amounts as claimed. The decision was based on the interpretation of Circulars and legal precedents, ensuring the appellant's entitlement to interest post the specified timelines. The judgment clarified the timeline for interest payment on refunded amounts, providing a significant legal precedent for similar cases in the future.