2023 (9) TMI 641 - AT - Central Excise

Relevant date for calculation of interest on refund, which was sanctioned and disbursed on 30.12.2020 - HELD THAT - There is clear direction by the Commissioner (Appeals) to pay interest and there was further direction to treat the period of interest starting after three months from the date of filing of refund claim i.e. 9.5.2019. The denial of interest subsequently by the Adjudicating Authority is highly illegal and also amounts to insubordination, by not following the directions of the superior court. Further, such act by the Adjudicating Authority is also contemptuous. The impugned order is set aside and the Adjudicating Authority is directed to grant the interest starting from 9th August, 2019 till the date of disbursement i.e. 30th December, 2020 - Appeal allowed.

Summary

Issues involved:
The relevant date for interest on refund entitlement.

Details of the judgment:
The Appellant, engaged in manufacturing various pumps, imported raw materials duty-free for export supplies but later paid duties due to export obligation shortfall. Post-GST implementation, the Cenvat credit for duties paid could not be availed or carried forward. Two refund applications were filed, which were initially rejected but later sanctioned subject to verification of unjust enrichment. However, interest on the refund was denied as documents were submitted late. The Commissioner (Appeals) allowed interest payment, citing precedents, and directed the Adjudicating Authority to pay interest u/s 11 BB of the Act from the date of the refund claim. The denial of interest was deemed illegal and contemptuous, leading to the appeal being allowed. The Adjudicating Authority was directed to grant interest from 9th August, 2019, till the disbursement date of 30th December, 2020, with adjustments for any prior interest payments, to be disbursed within 45 days.

Conclusion:
The appeal was allowed, setting aside the impugned order and directing the Adjudicating Authority to pay interest on the refund as per the Commissioner (Appeals) directions, starting from 9th August, 2019, until the disbursement date of 30th December, 2020, with adjustments for any prior interest payments, to be disbursed within 45 days.