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2016 (10) TMI 613 - AT - Central ExciseInterest on delayed refund of pre-deposit u/s 35 F of the Central Excise Act 1944 - Circular No. 802/35/2004-cx date 8/12/2014 issued from File No. 387/5/2001-JC - Held that - circular clarified that Delay beyond the period of three months will be viewed adversely and appropriate disciplinary action will be initiated against the concerned defaulting officers. All concerned are requested to note that default will entail an interest liability, if such liability accrues by reason of any orders of the CESTAT/ Court, such orders will have to be complied with and it may be recoverable from the concerned officers. Circulars issued by CBEC are binding on the field formations - interest on delayed payment allowed. Interest on interest - the decision in the case of Sandvik Asia Ltd. Vs CIT-I Pune 2006 (1) TMI 55 - SUPREME Court referred - Held that - the decision in the case not applicable as there was an inordinate delay of 12-17 years in payment of interest on refunds which is not the factual matrix in the present proceedings - interest on interest not allowed. Interest on delayed refund allowed - the relevant date for calculating the interest will be 3 months from CESTAT order dated 3/6/02 as per Para- 4 of CBEC Circular dated 8/12/2004 - appeal allowed - decided partly in favor of appellant.
Issues involved:
1. Entitlement to interest on delayed refund of pre-deposit made as a result of a stay order. 2. Entitlement to interest upon interest. 3. Appeal against rejection of interest claim. 4. Department's ability to open a new case before the second appellate authority. 5. Payment of interest on delayed interest payment. Issue 1: Entitlement to interest on delayed refund of pre-deposit: The appellant sought interest on a delayed refund of pre-deposit made following a stay order. The appellant argued that interest should be paid as per CBEC Circular dated 8/12/2004, which states that interest must be returned within 3 months from the date of the order passed by the Appellate Tribunal or Final Authority, unless there is a stay. The appellant relied on various case laws supporting their claim for interest. The Tribunal observed that Circulars issued by CBEC are binding, and consistent decisions by CESTAT and Superior Courts support the payment of interest on delayed refunds. The Tribunal found the first appellate authority's observations unsustainable and ruled in favor of the appellant for the payment of interest on delayed refund. Issue 2: Entitlement to interest upon interest: The appellant also claimed entitlement to interest upon interest, citing relevant case laws. However, the Tribunal did not deliberate on this aspect, as it was not discussed by the first appellate authority and could not be entertained at that stage. Issue 3: Appeal against rejection of interest claim: The Revenue argued that the appellant's request for interest on pre-deposits was rejected in a previous order, and as no appeal was filed against this rejection, the appellant could not claim interest on the pre-deposits made. The Tribunal noted that the appellant had addressed the rejection through letters and included the facts in their appeal before the first appellate authority. The Tribunal held that the Revenue should have filed an appeal if aggrieved by the first appellate authority's decision. Issue 4: Department's ability to open a new case: The appellant argued that the department could not open a new case before the second appellate authority when the first appellate authority's decision was not appealed against by the Revenue. The Tribunal agreed with the appellant, citing the Hindustan Polymers Co Ltd. case, and held that a new case could not be made out by the department in this situation. Issue 5: Payment of interest on delayed interest payment: Regarding the payment of interest on delayed interest payment, the Tribunal noted a case where there was a significant delay of 12-17 years, which was not the case in the present proceedings. The Tribunal did not entertain this aspect as it was not discussed by the first appellate authority and was not relevant to the current situation. In conclusion, the Tribunal allowed the appeal filed by the appellant for the payment of interest on delayed refund, citing the CBEC Circular and relevant case laws. The Tribunal specified the relevant date for calculating interest and upheld the appellant's claim in this regard.
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