2023 (7) TMI 1176 - HC - Central Excise

Interest on the delayed refund - Section 11B of the Central Excise Act, 1944 - HELD THAT - The Tribunal has given adequate reasons in both the orders impugned, including the order by which the Department s application for correction or modification was rejected. According to the Tribunal, the deposit was made at a time when no quantified claim had been made on the assessee. On such basis, the Tribunal found that the deposit had not been made on account of any duty or interest which would attract the implied bar under Section 11B of the Act. It was a possible view taken on the set of facts that presented themselves before the Tribunal and, in this appellate jurisdiction, such interpretation does not call for any interference. Further, as to the quantum of interest awarded, the Tribunal, which is a specialised body dealing in matters pertaining to excise duty, took into account the previous judgments of the Supreme Court, High Courts and the Tribunal itself to justify that the rate of 12 per cent per annum would apply in the facts of the present case. Again, since there is some basis to the award of interest by the Appellate Tribunal, the same does not call for any interdiction. Appeal dismissed.

Summary

Issues:
The legal issue in this case revolves around whether the respondent assessee was entitled to interest on a delayed refund made by the Department, particularly in the context of excess duty or interest paid.

Summary:
The case involved a dispute where the respondent assessee was found liable to refund cenvat credit to the extent of Rs.97 lakh, out of which approximately Rs.78 lakh was determined to be refundable by the Department. The assessee contended that the refund, which was deposited under protest and retained by the Department for a considerable period, should carry interest, despite the absence of any cenvat credit demand or penalty claim. The Department refused to pay interest, citing Section 11B of the Central Excise Act, which does not provide for interest on refunds. The Appellate Tribunal, however, found in favor of the assessee, awarding interest at a rate of 12 per cent per annum.

The Department argued that the initial deposit was made in anticipation of a claim for excess cenvat credit, thus falling under the bar of Section 11B. Additionally, it contended that interest on similar refunds had been awarded at a lower rate by the Delhi High Court. The Tribunal, in its orders, reasoned that the deposit was not made on account of duty or interest, thereby justifying the award of interest. It also held that interest on interest was not relevant at that stage. The Tribunal's decisions were upheld, and the Department was directed to make the interest payment within four weeks to avoid further claims by the assessee.

In conclusion, the judgments and orders of the Appellate Tribunal were allowed to stand, with no interference deemed necessary. The Department was instructed to make the interest payment promptly to settle the matter, failing which the assessee could pursue additional legal remedies.