2012 (10) TMI 113 - AT - Customs

Interest on interest - whether this Tribunal has power to award interest on delayed payment of interest to the assessee Held that - Tribunal has no such power for want of specific provision in the Central Excise Act/Rules for payment of interest on delayed payment of interest - appeals are dismissed

Summary

Issues:
1. Claim for interest on interest under Customs Act.
2. Claim for interest on excess anti-dumping duty refund.
3. Applicability of Tribunal's Larger Bench decision on interest on delayed payment.

Analysis:

1. The appellant had filed appeals claiming interest on interest deposited with the Department under protest. The refund of the deposited amount was obtained based on a Tribunal's order, but the claim for interest on the delayed refund was rejected by the Assistant Commissioner. The Commissioner (Appeals) upheld the rejection, leading to the first appeal before the Tribunal. The appellant argued for interest on interest, citing previous Tribunal orders, while the JCDR contended that no provision allowed interest on interest under the Central Excise Act or Customs Act. The Tribunal, after considering the submissions, referred to the Larger Bench decision in Sun Pharmaceuticals case, which held that interest on delayed payment of interest was impermissible due to the lack of specific provisions in the Act or rules. The Tribunal concluded that it had no power to award such interest, dismissing the appeal.

2. Another issue involved the appellant's claim for interest on the excess anti-dumping duty refund. The appellant received the refund amount after a Tribunal's decision, but the request for interest on this amount was initially denied by the Assistant Commissioner. The Commissioner (Appeals) also upheld this denial, leading to the second appeal before the Tribunal. The appellant referenced a Supreme Court judgment and previous Tribunal decisions to support their claim for interest on interest. However, the Tribunal reiterated the Larger Bench decision's stance that no provision allowed interest on delayed payment of interest under the Central Excise Act or Customs Act. The Tribunal emphasized that the Larger Bench decision was binding and dismissed the appeal accordingly.

3. The Tribunal's analysis extended to the broader issue of the applicability of the Larger Bench decision on interest on delayed payment. The Tribunal clarified that the decision in the Sun Pharmaceuticals case, which prohibited interest on delayed payment of interest due to the absence of specific provisions in the Acts or rules, was applicable to claims under both the Central Excise Act and the Customs Act. The Tribunal emphasized that the decision of the Larger Bench was binding and rejected any arguments contrary to it. The Tribunal differentiated previous judgments and highlighted that the specific issue of interest on delayed payment of interest was settled by the Larger Bench, reinforcing the dismissal of the appeals based on the established legal position.

In conclusion, the Tribunal dismissed both appeals concerning claims for interest on interest and interest on excess anti-dumping duty refund, citing the binding nature of the Larger Bench decision prohibiting interest on delayed payment of interest under the Central Excise Act and the Customs Act. The Tribunal emphasized the lack of specific provisions allowing such interest and upheld the decisions of the lower authorities in rejecting the claims.