2003 (9) TMI 181 - AT - Central Excise

Summary

Issues:
Interest on refund claim.

Analysis:
The appeal was filed by the assessee regarding interest on a refund claim in reference to Order-in-Appeal No. 240/2002-C.E., dated 22-4-2002. The party had filed a refund claim on 17-1-2000 after CEGAT's Final Order dated 25-11-99. The refund claim was adjusted towards another demand, which was challenged before the first appellate authority. A miscellaneous application was filed by the party to claim the refund amount. The Tribunal directed the Department to refund the amount in an order dated 20-9-2000.

Shri Raghu argued that the Department should have sanctioned the refund without the need for a separate application, and the party is entitled to interest on the refund amount from the date it was due till payment. Shri Narasimha contended that since the refund was given within three months of the Tribunal's order, no interest should be granted as per Sec. 11B of the Act. He also argued that the refund was a pre-deposit and not a duty amount, citing a Bombay High Court case.

The Tribunal observed that the party was entitled to the refund from the date of the Tribunal's final order, not from the date of the refund claim. It was incorrect for the authorities to adjust the refund amount towards another demand under challenge. The Tribunal held that the party is entitled to interest from 17-4-2000 till 5-12-2000. Consequently, the appeal was allowed.