2005 (4) TMI 232 - AT - Central Excise

Summary

Issues:
Prayer for interest on late payment of pre-deposit declined.

Analysis:
The appellants filed appeals against an order-in-appeal where the prayer for interest on late payment of pre-deposit was declined. They had deposited Rs. 4 lakhs in each case as pre-deposit, which was refunded to them after the Tribunal set aside the demand and remanded the matter. The appellants contended that they were entitled to interest on the refunded amount from the date of the final order till the date of refund. They relied on previous Tribunal decisions to support their claim. The Revenue argued that the refund was granted within three months from dropping the proceedings pursuant to the remand order.

The Vice-President found merit in the appellants' arguments, citing Section 11BB of the Central Excise Act, which entitles the assessee to interest on delayed refunds. Referring to a Supreme Court case and a Circular by the Central Board of Excise and Customs, it was clarified that interest is applicable on delayed refunds beyond three months. The Tribunal's decision also supported the payment of interest from the expiry of three months from the final order till the date of payment. Therefore, the appellants were deemed entitled to interest on the refund after three months from the date of the final order passed by the Tribunal. Consequently, the appeals were disposed of in favor of the appellants, granting them the interest on the refunded amount applicable during the relevant period.