2005 (1) TMI 121 - HC - Central Excise

Summary

Issues:
Refund of excise duty with interest

Analysis:
1. The petitioners sought a refund of Rs. 65,892 with interest, following a Tribunal order that favored them in a dispute over excise duty classification.
2. The dispute arose when the Central Excise Collector demanded additional excise duty from the petitioners for supplying equipment, which the respondents considered a refrigeration unit instead of a heat exchanger.
3. The Tribunal allowed the petitioners' appeal, directing a refund. However, delays ensued in processing the refund, leading to the filing of a writ petition by the petitioners.
4. The petitioners argued that the deposit made during the appeal stage was not a statutory liability but a security, citing precedents from the Bombay High Court and the Supreme Court.
5. The court agreed with the petitioners, emphasizing that the authorities had no right to withhold the refund after the Tribunal's decision.
6. The court rejected the respondents' arguments against granting interest, emphasizing the unjustified delay in refunding the amount.
7. Interest at the rate of 10% per annum was awarded from July 27, 1988, till April 27, 2000, to be paid by the respondents within four weeks of the judgment.

In conclusion, the court ruled in favor of the petitioners, ordering the respondents to pay interest on the refunded amount due to the unjustified delay in processing the refund, citing legal precedents and rejecting the respondents' arguments against granting interest.