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2022 (6) TMI 160 - AT - Central ExciseEntitlement of interest on delayed refunds - amount deposited is in the form of pre-deposit - HELD THAT - Though the appellant have paid the duty on the audit objection the same was paid as a duty only thereafter the appellant has not objected on the payment made by them. The refund application was filed after the commissioner (Appeals) allowed the cenvat Credit. The refund was sanctioned within 2 months from the date of filing application As per the Hon ble Supreme Court in the judgment of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT , the interest is payable only when there is a delay beyond 3 months from the filing of application of refund. In the present case the refund was sanctioned within 3 months. From Clause (ec) sub-clause of (B) of sub-Section 5(4), for the purpose of relevant date it is the order by which the amount became refundable must be considered. In the present case it is the order of the Commissioner (Appeals) by which the refund became payable to the appellant. Therefore, prior to the date of order of Commissioner (Appeals) there was no cause for granting any refund. Moreover, even the appellant also not sought for any refund prior to the order of the Commissioner(Appeals). The interest is payable only after 3 months from the date of application of refund - In the present case admittedly the refund was sanctioned within 3 months from the date of application. Hence no interest is payable. Appeal dismissed.
Issues:
1. Entitlement to interest on sanctioned refund claim. 2. Interpretation of payment as duty or pre-deposit. 3. Application of relevant legal provisions regarding refund and interest. Detailed Analysis: 1. The case involved a dispute regarding the entitlement to interest on a sanctioned refund claim. The appellant had filed a refund claim after the Commissioner (Appeals) allowed the Cenvat Credit. The refund was sanctioned within 2 months from the date of filing the application. The issue was whether interest was payable on the sanctioned refund. The appellant contended they were entitled to interest, while the revenue argued that since the refund claim was sanctioned within 3 months from the filing date, no interest was payable. 2. The crucial point of contention was the nature of the payment made by the appellant. The revenue argued that the amount paid during the Show Cause Notice proceedings should be considered as duty and not as a pre-deposit. They cited judgments from the High Court of Gujarat and the Supreme Court of India to support their argument. The appellant's Chartered Accountant submitted that the payment should be considered as a pre-deposit, entitling them to interest. The Tribunal analyzed the nature of the payment in detail based on legal provisions and case law. 3. The Tribunal carefully considered the submissions from both sides and examined the relevant legal provisions. Referring to Section 11B and relevant case law, the Tribunal emphasized that interest is payable only when there is a delay beyond 3 months from the filing of the refund application. The Tribunal highlighted the importance of the order by which the amount became refundable in determining the relevant date for interest calculation. Based on the analysis of legal provisions and case law, the Tribunal concluded that the appellant was not entitled to interest as the refund was sanctioned within the stipulated time period. In conclusion, the Tribunal upheld the impugned order, dismissing the appeal and emphasizing that interest on the sanctioned refund was not payable due to the timely processing of the refund claim within the prescribed period. The judgment provided a detailed analysis of the legal provisions, case law, and the nature of the payment made by the appellant, ensuring a comprehensive understanding of the issues involved in the case.
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