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2020 (12) TMI 122 - AT - Central ExciseInterest on delayed refund - Refund of pre-deposit - inordinate delay in sanctioning the refund claim by the authorities - relevant date for calculation of Interest - Section 35FF of Central Excise Act, 1944 - HELD THAT - The appellant is entitled to claim the refund of ₹ 15 lacs. Furthermore, during the course of arguments, it came to the knowledge of the Bench that the appellant filed the appeal against the order of the adjudicating authority appropriating the amount of refund claim before the Commissioner (Appeals) and intimated to the ld. Commissioner (Appeals) vide letter dt. 12.06.2019 that this Tribunal has allowed the refund to the appellant on 21.05.2019. Instead of taking note of the said fact, the ld. Commissioner (Appeals) dismissed the appeal filed by the appellant without taking note of the decision of this Tribunal on 22.07.2019, whereas the order of this Tribunal was uploaded on the website itself on 01.07.2019. The act of the ld. Commissioner (Appeals) cannot be appreciated. Relevant date for calculation of Interest - HELD THAT - Admittedly, as per Section 35FF of the Act, the appellant was entitled to claim the interest on delayed refund after three months from the date of the order of this Tribunal. This Tribunal has finally disposed of the appeal of the appellant on 05.07.2018 - thus appellant is entitled to claim interest from 19.02.2019 the day on which the refund claim was allowed till its realization. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Entitlement to refund claim. 2. Entitlement to interest on delayed refund. 3. Date from which interest on refund is applicable. Issue-wise Detailed Analysis: 1. Entitlement to Refund Claim: The appellant reversed Cenvat credit of ?17,67,816/- on 24.04.2009, which was inadvertently entered. A show cause notice was issued on 16.09.2010 demanding Cenvat credit of ?78,30,427/- and appropriating the already reversed amount. The adjudication order dated 15.12.2010 confirmed these demands and imposed penalties. The appellant appealed on 20.03.2012, and the Tribunal ordered a pre-deposit of ?15,00,000/-. The appellant complied on 15.05.2013. The appeal was disposed of on 05.07.2018, setting aside the impugned order, and the appellant filed for a refund of ?15,00,000/- on 12.09.2018. The adjudicating authority sanctioned the refund on 19.02.2019 but appropriated it against penalties and interest. The Tribunal, on 21.05.2019, set aside these demands specifically. The Commissioner (Appeals) dismissed the appeal without considering the Tribunal's order, leading to the current appeal. 2. Entitlement to Interest on Delayed Refund: The Tribunal found that the merits of the case were not disputed and the appellant was entitled to the refund of ?15,00,000/-. The issue was whether interest on the delayed refund was applicable. Section 35FF of the Central Excise Act, 1944, was relevant, stating that interest is payable if the refund is not made within three months from the communication of the appellate authority's order. 3. Date from Which Interest on Refund is Applicable: The Tribunal ruled that the appellant was entitled to interest on the delayed refund from 19.02.2019, the date when the refund claim was allowed, until its realization. The Tribunal rejected the argument that the date should be from the final disposal of the appeal on 05.07.2018, citing that the adjudicating authority's act of appropriating the refund amount was a misinterpretation, not a mistake apparent on record. Conclusion: The Tribunal held that the appellant is entitled to a refund of ?15,00,000/- along with interest on the delayed refund from 19.02.2019 until its realization. The appeal was disposed of in these terms.
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