2005 (8) TMI 206 - AT - Central Excise

Summary

Issues:
1. Entitlement to interest on refunded amount without a specific request made by the appellant.

Analysis:
The dispute in this case revolved around the entitlement of the appellant to interest on a refunded amount of Rs. 3,20,473/-, which was sanctioned by the Deputy Commissioner but without any interest being provided. The appellant, aggrieved by the lack of interest, filed an appeal before the Commissioner (Appeals). The Appellate Tribunal observed that the appellant did not request interest at the time of filing the refund claim. However, the Member (J) of the Tribunal held that the entitlement to interest is not dependent on the appellant's request. Interest is inherently linked to the claim of refund, and it accrues to the assessee as per the provisions of Section 11B regardless of whether the claimant demanded it or not.

The Member (J) emphasized that Sections 11B and 11BB are to be read together and followed mandatorily. When a refund is sanctioned, the proper officer has no discretion to ignore or withhold the interest due according to the law. It was clarified that interest provisions are applicable even to the refund of duty resulting from allowing an appeal. Therefore, the impugned order was set aside, and the Deputy Commissioner was directed to quantify the interest in compliance with the provisions of Section 11BB and in consideration of the Tribunal's precedent decisions on the matter.

In conclusion, the appeal was disposed of with the direction to provide interest on the refunded amount in accordance with the legal provisions and precedents. This judgment reaffirms the mandatory nature of interest entitlement on refunded amounts and clarifies that it is not contingent upon a specific request by the appellant but is a statutory right under the relevant sections of the law.