2021 (5) TMI 903 - AT - Central Excise

Grant of interest on delayed refund - relevant time for calculation of interest - annual production capacity under Compound Levy Scheme was fixed - HELD THAT - The appellant filed the refund claim on 14.09.2005. The said application was kept pending by the Revenue and the same was not entertained. It was entertained only after the adjudication order on 31.10.2008 and the amount of refund was adjusted against the demand raised by order dt. 17.10.2008. Again, the litigation continued and finally this Tribunal hold that the said demand is not sustainable and remanded the matter back to the adjudicating authority for fresh adjudication. In terms of the decision of the Hon ble Apex Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT , wherein the Apex Court has held that if the assessee filed the refund claim is entitled to claim the interest on delayed refund after three months from the date of filing of the refund claim although there is a litigation in the matter. In the present case, it is apparent on record that the said refund was sanctioned but was adjusted against the demand which was not sustained - the appellant is entitled to claim interest after three months from the date of filing of the refund claim i.e., after 3 months of date of filing the refund claim i.e., 14.09.2005 till its realization. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Entitlement to interest on delayed refund.

Analysis:
The appellant appealed against the impugned order for not granting interest on a delayed refund. The case involved a series of events starting from the fixing of annual production capacity under the Compound Levy Scheme in 1998, which was later challenged and remanded back for re-determination. The appellant made a pre-deposit of ?20 lakhs in 2003, which was later refunded and adjusted against a demand in 2008. The appellant filed a refund claim in 2005, which was not entertained until 2008 due to ongoing litigation. The Tribunal held that the appellant is entitled to claim interest on the delayed refund as per the decision in Ranbaxy Laboratories Limited vs. CCE, where it was stated that interest can be claimed after three months from the date of filing the refund claim, even during ongoing litigation. The Tribunal ruled that the appellant is entitled to claim interest from three months after the date of filing the refund claim in 2005 until its realization, setting aside the impugned order and allowing the appeal with consequential relief.

This judgment clarifies the entitlement to interest on delayed refunds, emphasizing the rights of the appellant to claim interest even during ongoing litigation. The decision is based on legal precedents and principles established by the Hon'ble Apex Court, ensuring fair treatment for appellants seeking refunds. The Tribunal's detailed analysis of the timeline of events and the legal framework surrounding refund claims demonstrates a thorough understanding of the case and relevant legal provisions. The ruling provides clarity on the calculation of interest on delayed refunds, ensuring that the appellant receives appropriate compensation for the delay in refund processing. Overall, the judgment upholds the principles of justice and fairness in dealing with refund claims, setting a precedent for similar cases in the future.