2024 (8) TMI 7 - AT - Central Excise

Interest of delayed refund - relevant date for calculation of such interest - rate of interest - HELD THAT - The dispute in the present appeal is no more res integra and is squarely covered by the decision of the Tribunal in the case of M/S. MARSHALL FOUNDRY ENGG. PVT. LTD., M/S. MARSHALL AUTO CAST PVT. LTD., M/S. MARSHALL FOUNDRY WORKS PVT. LTD., M/S. MARSHALL CASTING LIMITED AND M/S. MARSHAL ATUT INDUSTRIES LIMITED VERSUS COMMISSIONER OF CGST, FARIDABAD 2019 (11) TMI 1269 - CESTAT CHANDIGARH where it was held that ' appellants are entitled to claim the interest on delayed refund from the date of deposit till its realization.' As the issue has already been examined by the Tribunal and consistent view has been taken all along. Therefore, the Appellant is entitled to claim of interest on the delayed refund from the date of deposit till the date of its realization. The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.

Summary

Issues Involved:
1. Entitlement to interest on delayed refund.
2. Rate of interest applicable on delayed refund.
3. Period from which interest on delayed refund is to be calculated.

Detailed Analysis:

1. Entitlement to Interest on Delayed Refund:
The core issue addressed in the judgment is whether the appellant is entitled to interest on the delayed refund. The Tribunal referenced its previous decisions, including *M/s Marshall Foundry & Engineering Pvt. Ltd. vs. Commissioner of CGST, Faridabad* and *M/s Fujikawa Power and others vs. CCE, Chandigarh-I*. It was established that the appellant is indeed entitled to claim interest on the delayed refund. The Tribunal cited Section 35FF of the Central Excise Act, 1944, which mandates that interest is payable if the refund is not processed within three months from the date of the appellate authority's order.

2. Rate of Interest Applicable on Delayed Refund:
The Tribunal examined the applicable rate of interest on delayed refunds. It referenced the decision of the Hon'ble Apex Court in the case of *Sandvik Asia Ltd.*, which held that the assessee is entitled to interest on delayed refunds. The Tribunal also cited the Hon'ble Kerala High Court's decision in *Sony Pictures Networks India Pvt. Ltd.*, which fixed the interest rate at 12% per annum. The Tribunal found that the provisions of Section 243 of the Income Tax Act, 1961, and Section 35FF of the Central Excise Act, 1944, are parimateria, thereby justifying the application of a 12% interest rate.

3. Period from Which Interest on Delayed Refund is to be Calculated:
The Tribunal clarified that the interest on the delayed refund should be calculated from the date of deposit until the date of realization. This conclusion was supported by the Tribunal's consistent view in previous cases, including *Ghaziabad Ship Breakers Pvt. Ltd.*, where it was held that interest at 12% should be paid from the date of deposit.

Conclusion:
The Tribunal concluded that the appellant is entitled to interest on the delayed refund from the date of deposit until the date of realization at a rate of 12% per annum. The impugned order was set aside, and the Order-in-Original was upheld. The appeal filed by the appellant was allowed with consequential relief as per law.

(Order pronounced in open court on - 29th July, 2024)