2018 (12) TMI 1577 - AT - Central Excise

Interest on delayed refund - Relevant dates - amount was paid under protest - demand of interest for the period between date of deposit under protest till the date of sanctioning of the refund - Held that - The amount paid by the appellant was under protest during the course of investigation itself. Therefore, the said amount is not paid towards duty and was a deposit by the appellant under protest. As held by the Hon ble High Court of Madras in the case of Ucal Fuel Systems Ltd. 2011 (9) TMI 903 - MADRAS HIGH COURT the provisions of section 11BB of Central Excise Act is not applicable as the amount in question was not paid towards duty, but only by way of deposit during investigation. The learned Commissioner(Appeals) has rightly sanctioned the refund of interest to the respondent from the date of deposit till the date of refund - appeal dismissed - decided against Revenue.

Issues:
- Appeal against order allowing interest to the respondent from the date of deposit till refund claim is sanctioned.
- Entitlement of interest to the respondent from the date of deposit under protest till the date of refund.
- Interpretation of statutory provisions regarding payment of interest on refund claims.
- Examination of case law regarding payment of interest on deposits made under protest during investigation.

Analysis:

1. Interest Payment Timeline:
The appeal centered around the interest payment to the respondent from the date of deposit till the refund claim is sanctioned. The Revenue argued that interest is payable for delayed refund after three months from the date of filing the refund claim. However, the respondent contended that since they paid the amount under protest, they are entitled to interest from the date of deposit till realization.

2. Legal Interpretation of Interest Payment:
The Commissioner(Appeals) examined the issue thoroughly and found that the adjudicating authority was convinced of the appellant's eligibility for interest as per relevant Notification. The Commissioner observed that any amount collected without legal authority and later ordered to be refunded should include interest. The impugned order rejecting interest payment was deemed unsustainable as it lacked legal basis, especially considering the refund was in compliance with the Tribunal's order.

3. Statutory Interest Provision:
The appellant argued for interest payment at a commercial rate, but the Tribunal referred to a Supreme Court ruling stating that only interest provided under statute can be claimed from the Revenue. The Tribunal upheld the interest payment as per the statute, emphasizing that the interest to be paid would be as per the statutory provisions.

4. Precedent and Case Law Analysis:
The Tribunal referenced a Madras High Court case where interest was granted on deposits made under protest during investigation. Since the appellant's payment was under protest and later deemed unnecessary due to a Tribunal order, the Tribunal held that the provisions of the Central Excise Act regarding interest were not applicable. Following the precedent decision of the Madras High Court, the Tribunal affirmed the Commissioner(Appeals)'s decision to sanction interest to the respondent from the date of deposit till the date of refund.

5. Final Decision:
After considering all arguments, case law, and statutory provisions, the Tribunal found no fault in the impugned order. Consequently, the appeal filed by the Revenue was dismissed, upholding the decision to grant interest to the respondent from the date of deposit till the refund date.

This detailed analysis provides a comprehensive overview of the judgment, highlighting the key legal arguments, interpretations, and precedents considered by the Tribunal in reaching its decision.

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