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Claim for payment of interest on refund application. Analysis: The appellant, Larsen & Toubro Limited, imported machinery in 1996 and claimed exemption, but the claim was rejected in 1999. A bank guarantee was encashed in 2000, and the appellant filed an appeal against the rejection. The Commissioner (Appeals) waived further pre-deposit requirements, and the appeal was allowed in 2000. The appellant then sought a refund of the encashed amount, which was granted in 2001 without interest. A subsequent appeal for interest was rejected by the Commissioner, leading to the present appeal. The appellant argued that interest should be paid as per a circular issued by the Revenue, citing a Supreme Court judgment. The circular mandated the return of pre-deposits within three months of a favorable appellate order, failing which interest would be payable. The appellant contended that interest should start accruing three months after the Commissioner's order allowing the appeal. The Revenue opposed the claim, arguing that the refund application did not initially include a claim for interest. They asserted that interest should start accruing three months after the Tribunal's order, not the Commissioner's. The Revenue also cited legal precedents to support their position that encashment of a bank guarantee does not constitute payment of duty attracting interest. The Tribunal held that interest should be paid from three months after the Commissioner's order allowing the appeal, in line with the circular and Supreme Court judgment. They rejected the Revenue's arguments, emphasizing that encashment of a bank guarantee constitutes payment and that delaying refunds and interest payments through futile appeals is unjust. The Tribunal emphasized the need to adhere to the circular and Supreme Court judgment regarding the return of pre-deposits within three months of a favorable appellate order. In conclusion, the Tribunal ruled in favor of the appellant, ordering the payment of interest from three months after the Commissioner's order allowing the appeal. The impugned order denying interest was set aside, emphasizing compliance with the circular and legal precedents regarding the timely return of pre-deposits and payment of interest.
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