2009 (11) TMI 315 - AT - Central Excise

Interest-delayed refund of pre-deposit- Pre-deposit made in first round of litigation. Appeal allowed in second round. C.B.E & C. Circular No. 802/305/2004-CX. dated 8.12.2004 lays down that pre-deposit shell be returned within a period of three months of disposal of appeal in assessee s favour and interest shall be payable for delay in refund. Appellants entitled to interest as allowed by the Tribunal in the case of India Polyfibres Ltd. in 2008 (226) E.L.T. 133 (Tribunal). In most of the cases, interest allowed at the rate of 12% P.A.. Miscellaneous application allowed.

Summary

Issues:
- Refund of pre-deposit along with applicable interest under Rule 41 of CESTAT (Procedure) Rules, 1982.

Analysis:
The case involved an application seeking directions for the refund of a pre-deposit made by the appellant, along with applicable interest under Rule 41 of CESTAT (Procedure) Rules, 1982. The appellant had initially deposited Rs.6,00,000/- for a hearing, which was later refunded, but the interest on the pre-deposit was yet to be received. The appellant claimed entitlement to interest for the delay in refund beyond three months of each order of the Tribunal remanding the matter for de novo adjudication. The appellant relied on a circular issued by CBEC allowing interest on delayed refunds, as well as various judicial authorities supporting the claim for interest at 12% per annum. The Tribunal noted similar cases where interest was granted to appellants for delays in refunding pre-deposits, and the CBEC circular specifying the refund timeline and interest payment for delays. After considering the submissions and the circular, the Tribunal held that the appellants were entitled to interest at the rate of 12% per annum, in line with previous decisions. The miscellaneous application was allowed, granting the appellants the requested interest.

In conclusion, the Tribunal's decision in this case emphasized the entitlement of the appellants to interest on the pre-deposit refund beyond the specified timeline, as per the CBEC circular and previous judicial precedents. The Tribunal ordered the appellants to be paid interest at the rate of 12% per annum, aligning with the prevailing practice in similar cases.