2022 (10) TMI 140 - AT - Central Excise

Interest on refund of an amount which was paid during investigation - HELD THAT - The issue involved in the case of Gyal M G Gases P Ltd 2015 (2) TMI 302 - CESTAT NEW DELHI is identical and the facts are also similar. It was held in the said case that The refund application was filed only on 06.07.2004. In terms of Section 11BB of the Central Excise Act, the interest liability of the Department for delay in payment of refund under Section 11B arises, only when there is delay beyond 3 months from the date of filing of the refund application. Thus, appeal is dismissed.

Summary

Issues Involved:
Entitlement to interest on refund of amount paid during investigation.

Comprehensive Analysis:

Issue 1: Entitlement to Interest on Refund
The main issue in this case revolves around the entitlement of the appellants to interest on the refund of an amount they had paid during an investigation. The appellants had initially deposited a certain sum during the investigation, which was later confirmed by the original adjudicating authority. However, this order confirming the demand was subsequently set aside, leading to the appellants being granted a refund of the amount they had deposited. The crux of the matter is whether the appellants are entitled to interest on the refunded amount. The appeal seeks to establish the right to interest on the amount already refunded to the appellant.

Issue 2: Precedents and Legal References
The Learned Counsel for the appellant has cited several decisions to support their claim for interest on the refunded amount. They have relied on cases such as Safal Food Products, Riba Textile, and Futura Ceramics Pvt Ltd, where similar issues were addressed by Single Member Bench judgments. On the contrary, the Revenue has referred to the decision in the case of Ratnamani Metals & Tubes Ltd and the Division Bench decision in the case of Gyal M G Gases P Ltd. The latter case involved a detailed analysis where the Department had paid interest from a specific date, leading to a dismissal of the appeal due to lack of merit.

Issue 3: Interpretation of Legal Provisions
The judgment delves into the interpretation of legal provisions such as Section 11B and Section 11BB of the Central Excise Act concerning the liability of the Department for delay in payment of refunds. It highlights that interest for delayed refunds is payable under Section 11BB from the date of expiry of a 3-month period from the date of the refund application, not from the date of the appellate order allowing the refund. The decision in the case of Ranbaxy Laboratories Ltd. v. Union of India is cited to support this interpretation, emphasizing the importance of timely refund applications and the corresponding interest liabilities.

Conclusion
Ultimately, the Tribunal finds that the issue at hand is identical to a previous case involving Gyal M G Gases P Ltd, where the Division Bench decision is considered binding due to similar facts and issues. As a result, the appeal in this instance is dismissed based on the precedent set by the earlier judgment. The detailed analysis of legal provisions, precedents, and interpretations culminates in the dismissal of the appeal seeking interest on the refunded amount, aligning with established legal principles and decisions.

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