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Issues involved: The judgment pertains to the matter of refund of a sum deposited by the petitioner as directed by the authority or Tribunal in connection with a Central Excise issue. The main issue is whether the refund should include interest and if so, at what rate and from which date.
Refund with Interest: The petitioner sought a refund of Rs. 10,00,000/- with compound interest at 24% p.a. The court acknowledged that the issue involves unjust enrichment by the governmental authority. The court held that the writ court can entertain and determine the matter of refund with interest, considering previous judgments favoring refund with interest in cases of unjust enrichment. Rate of Interest: The petitioner's counsel argued that the appropriate rate of interest for the refund should be 18% per annum, citing an amendment to the Negotiable Instruments Act. The court considered various judgments and concluded that in the absence of a fixed rate, the usual banking rate of interest, not less than 18% per annum, would be justifiable. Nature of Deposit: The authority contended that the pre-deposit made by the petitioners for hearing the appeal should not be considered as an illegal recovery and hence not subject to interest on refund. They argued that pre-deposit is not a payment of duty but a deposit for awaiting the right of appeal, thus the doctrine of unjust enrichment does not apply. Equitable Considerations: The court emphasized the equitable principle in considering the issue of unjust enrichment. It analyzed the nature of the pre-deposit made by the petitioners in connection with the contested levy, highlighting that the intention was not to burden the Tribunal unjustly and that the petitioners should be entitled to interest on the refund. Final Decision: The court ruled in favor of the petitioner, stating that they are entitled to interest at 18% per annum on the principal sum of the refund of the pre-deposit made to the authorities. The interest calculation would start from the date of the final order, and the payment was directed to be made within one month to avoid further increase due to interest. No costs were awarded in the judgment.
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