2015 (6) TMI 867 - AT - Central Excise

Refund claim - Unjust enrichment - Held that - Appellant has filed refund claims in March/April,2002. No Deficiency memo was issued to the appellant for different refund claims and the same has been accepted by the department. Only on 11.10.2002, a show cause notice has been issued whereas refund claim has been required to be entertained within three months from the date of filing of the refund claim. But nothing was done in three months therefore, the argument advanced by the Ld. AR that appellant has not supplied required documents is not tenable. - issue is no more res integra wherein it has been held that for delayed refunds, interest is payable after three months from the date of filing the refund claim till its realization. Therefore, I hold that the appellant is entitled to claim the interest after three months from the date of filing of the refund claim till its realization. The impugned order is set aside. - Decided in favour of assessee.

Summary

Issues Involved:
Claim of interest on delayed refund.

Analysis:
The appellant filed refund claims in March/April 2002, which were later transferred to the Consumer Welfare Fund. The adjudicating authority initially rejected the claim, but after a remand by the Tribunal, the refund was sanctioned on 14.08.2012. The appellant then sought interest on the delayed refund, which was denied by the lower authorities. The key contention was whether interest on delayed refund is payable after three months from the date of filing the refund claim.

The appellant argued that as per the decision in Ranbaxy Laboratories Ltd. case and a similar ruling by the Tribunal in M/s Bazpur Cooperative Sugar Factory Ltd., interest on delayed refund is entitled after three months from the filing date. The appellant's counsel pointed out that the issue is settled law and prayed for the appeal to be allowed with consequential relief.

On the other hand, the respondent contended that the appellant had not provided relevant documents initially, as noted in a previous Tribunal order. However, the required documents were later submitted, leading to the sanctioning of the refund claim. The respondent argued that interest is not payable due to the initial lack of documentation.

After hearing both parties, the Tribunal noted that no deficiency memo was issued to the appellant for the refund claims, which were accepted by the department. The show cause notice issued after six months did not change the fact that the refund claim should have been processed within three months. Citing the precedent set by the Supreme Court in the Ranbaxy Laboratories Ltd. case, the Tribunal held that interest on delayed refunds is payable after three months from the filing date until realization. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.