2003 (8) TMI 52 - HC - Central Excise

Summary

Issues:
1. Claim for interest on refunds under Section 11BB of the Central Excise Act, 1944.
2. Rejection of interest claim by Respondents.
3. Statutory right to interest on delayed payment.
4. Adjudicatory order for interest.
5. Appealability of the order Annexure-N.

Analysis:

Issue 1: Claim for interest on refunds under Section 11BB
The petitioner, a manufacturer and packer of instant coffee, exported goods without payment of Central Excise duty and sought a refund of Modvat credit. Refund claims were made, and after a series of rejections and appeals, refunds were ordered. The petitioner then sought interest on the refunded amounts as per Section 11BB of the Act, which provides for interest on delayed payments.

Issue 2: Rejection of interest claim by Respondents
The Respondents rejected the claim for interest, stating that no interest was payable as it was granted within three months from the date of the order of the Assistant Commissioner after remand. The Respondents argued that the petitioner should have filed an appeal against the impugned order if aggrieved.

Issue 3: Statutory right to interest on delayed payment
Section 11BB of the Act provides for interest on delayed payment of refunded duty. The Court noted that the petitioner had a statutory right to interest on delayed payment in the absence of an order disposing of the application under Section 11BB(1). The Court emphasized that any subsequent settlement after remand does not negate the statutory right to interest.

Issue 4: Adjudicatory order for interest
The Court held that the rejection of interest by the Respondents required intervention as the petitioner was invoking a statutory right. The Court directed the Respondents to pay interest at 5% from the date of the application, citing previous legal precedents where Courts granted interest under Article 226 of the Constitution in the absence of a specific provision.

Issue 5: Appealability of the order Annexure-N
The Court clarified that the order Annexure-N was not an adjudicatory order but an endorsement, making it non-appealable. The Court allowed the petition and directed the Respondents to settle the interest at 5% within three months from the date of the order, from the date of the application till the date of payment, without imposing any costs.