2018 (11) TMI 1455 - AT - Central Excise

Interest on delayed Refund - relevant date - From which date the appellant is entitled for interest on the sanctioned refund? - Held that - The refund application filed by the applicant was admittedly filed on 14.07.1999 only, thereafter, the cause of action for refund arises. Since an amount i.e. 60 Lacs minus adjudged due as per order in original dated 21.04.1999 become refundable and the same should have been sanctioned within 3 months from date of filing of application i.e. 14.07.1999. Accordingly, on such balance amount the interest is payable from 3 months of date of filing the refund i.e. 14.07.1999. As regard remaining amount of refund that has arisen only from the date of Tribunal order dated 12.06.2002 by which the demand confirmed by the original order was set aside, that means the amount of duty which was set aside by the Tribunal become refundable from 3 months of Tribunal order dated 12.06.2002. Accordingly, on such amount interest is payable from 3 months of date of Tribunal order. In the present case, the period for interest has to be reckoned not only with reference to filing of refund application but also as per the provision of explanation (B)(ec) of section 11B, therefore, interest is payable in accordance with said provision. Appeal allowed in part.

Summary

Issues involved:
Determining the date from which the appellant is entitled to interest on a refund claim sanctioned to them.

Analysis:
The appellant deposited ?60 Lacs under protest during an investigation and later filed a refund claim on 14.07.1999, which was kept pending by the Jurisdiction Assistant Commissioner. The matter was taken to the Appellate Tribunal, which, in an order dated 12.06.2002, rejected the appeal by the department and allowed the appellant's appeal partially. The appellant sought interest on the sanctioned refund from the date of deposit instead of the date of the Tribunal order. The Ld. Commissioner (Appeals) held that interest should be paid from 3 months from the date of the CESTAT order, leading the appellant to file the present appeal.

Appellant's Argument:
The appellant's counsel argued that since the deposit made was not a duty but only a deposit during the investigation, the amount should be refundable from the date of deposit itself, entitling the appellant to interest from that date. The counsel cited various judgments to support this claim.

Revenue's Argument:
The Revenue's representative reiterated the findings of the impugned order, stating that since the appellant voluntarily deposited the duty and the demand issue was settled by the CESTAT order, interest was rightly ordered from 3 months after the Tribunal's decision. The representative also cited relevant judgments to support this stance.

Tribunal's Decision:
After considering both sides' submissions and reviewing the records, the Tribunal concluded that the appellant is entitled to interest on the refund claim from specific dates. The Tribunal noted that the amount left unappropriated against the deposit of ?60 Lacs became refundable within 3 months of the date of the refund application, i.e., 14.07.1999. Interest was deemed payable from that date. Additionally, the Tribunal determined that the interest on the remaining amount arose from the date of the Tribunal order dated 12.06.2002. The decision was in line with the relevant legal provisions and previous judgments, emphasizing that interest on refunds is payable from 3 months of the filing of the refund application. The Tribunal partially allowed the appeal based on these findings.

This comprehensive analysis of the judgment highlights the key arguments presented by both parties, the legal basis for their claims, and the Tribunal's decision based on the facts and applicable laws.