2008 (7) TMI 713 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are the refund claim of excess duty paid on physician samples, the rejection of part of the refund amount by the Deputy Commissioner, the appellant's claim for interest on the refunded amount, and the Revenue's appeal against the order sanctioning the refund.

Refund Claim of Excess Duty Paid on Physician Samples:
The appellant, engaged in manufacturing medicaments, cleared physician samples paying duty based on the sale price. A refund claim of Rs. 35,40,900 was made on the grounds of excess duty payment, citing a Board's circular. The Commissioner (Appeals) allowed the refund application, emphasizing that free distribution of physician samples enhances sales. The Tribunal upheld this decision, leading to the allowance of the refund application.

Rejection of Part of Refund Amount by Deputy Commissioner:
The Deputy Commissioner sanctioned a partial refund of Rs. 17 lakhs, rejecting the balance of Rs. 18 lakhs, stating that the Board's circular was effective only from 1-7-2002. The Commissioner (Appeals) sanctioned the remaining amount, relying on the Tribunal's decision, but denied interest on the refunded amount due to ongoing litigation. The dispute in this appeal pertains to the appellant's claim for interest.

Appellant's Claim for Interest on Refunded Amount:
The appellant's refund application was made on 26-12-2002, with the 3-month period expiring around 26-3-2003. The Commissioner (Appeals) rejected the claim for interest, citing ongoing litigation. However, the Tribunal held that interest is payable under Section 11BB if the refund is ultimately found payable, even after the expiry of the 3-month period. The appellant was deemed entitled to interest, and the matter was remanded for quantification.

Revenue's Appeal Against Refund Order:
The Revenue appealed the order sanctioning the refund, arguing against the retrospective effect of the Board's circular. The Tribunal upheld the Commissioner (Appeals)' decision, noting that the Tribunal's order had attained finality and must be implemented. The Revenue's appeal was rejected, and both appeals were disposed of accordingly.