2007 (10) TMI 240 - AT - Central Excise

Interest on the delayed refund refund claim filed earlier but settled after Tribunal s order - application for refund should be made within one year from the date of payment of duty under protest - appeal of the appellant is allowed and it is directed that the appellants be given appropriate rate of interest, which was prevailing during the period, for the period beyond of three months from the date of filing of claim

Summary

Issues:
- Eligibility for interest on refund amount due to appellant
- Interpretation of relevant legal provisions regarding interest on refund claims

Issue 1: Eligibility for interest on refund amount due to appellant
The appeal before the Appellate Tribunal CESTAT, Mumbai revolved around the question of whether the appellant was entitled to interest on the refund amount due to them as a consequential relief following a Tribunal order. The appellant had filed a refund claim disputing an amount paid under the insistence of Central Excise Officers. The Tribunal's order dated 23/08/2005 settled the issue in favor of the appellant. However, the lower authorities allowed the refund claim but did not grant any interest on the refunded amount. The Commissioner (Appeal) also ruled against the appellant, leading to the appeal before the Tribunal.

Issue 2: Interpretation of relevant legal provisions regarding interest on refund claims
The Ld. Advocate for the appellant argued that the issue was covered by a decision of the Larger Bench of the Tribunal and a judgment of the High Court of Rajasthan in similar cases. On the other hand, the Ld. SDR contended that the Commissioner (Appeal)'s decision was correct as the refund of duty, paid by the appellant pending finalization of the decision, was not entitled to interest since the amount was refunded within three months of the Tribunal's order. The Commissioner (Appeals) rejected the appeal of the appellant and held that the interest amount was not admissible based on the specific circumstances of the case.

The Tribunal, after considering the submissions from both sides and perusing the records, analyzed the Commissioner (Appeals)'s decision. The Tribunal found that the findings of the Commissioner (Appeals) contradicted the findings of the Larger Bench of the Tribunal in a similar case. Citing the judgments of the Larger Bench and the High Court of Rajasthan, the Tribunal held that the appellants were indeed eligible for interest on the refund amount at the appropriate rate prevailing during the relevant period, after three months from the date of filing the refund claim. Consequently, the appeal of the appellant was allowed, and it was directed that the appellants be given the appropriate rate of interest for the period beyond three months from the date of filing the claim.