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Issues involved: Determination of the period for claiming interest on duty refund.
The dispute in this case revolves around the entitlement of the applicant to claim interest on duty refund. The applicant asserts its right to interest from 5-2-98, the date of its refund application, while the respondent argues that interest should be calculated from 6-12-2001, the date of the refund application after the final order by the Tribunal. The respondent relies on a decision of the Calcutta High Court in Eastern Coils (P) Ltd. v. CCE, Kolkata [2003 (153) E.L.T. 290 (Cal.) = 2002 (51) RLT 1011] to support its stance. The applicant initially filed a refund application on 5-2-98 based on an Order-in-Original dated 31-10-97. This application was rejected as time-barred by the Asstt. Commissioner, and the appeal to the Commissioner (Appeals) was also dismissed. Subsequently, an appeal was made to the Tribunal, which on 31-10-2001, ruled that the refund application was timely and ordered the refund, which was then made on 8-4-2003. The applicant claims interest as per Section 11BB, which mandates payment of interest if duty ordered to be refunded is not repaid within three months of the application. The provision allows for interest at a rate fixed by the Central Government. The Explanation to this section clarifies that orders of refund by higher authorities are deemed to be under Section 11B for interest calculation purposes. Considering the Explanation, the Tribunal's Final Order on 6-12-2001 is deemed to relate back to the original order date under Section 11B. Therefore, the applicant is justified in seeking interest from 5-2-98. The Kolkata High Court decision cited by the respondent pertains to a different scenario involving pre-deposit refund, where interest liability arises post the final authority's decision. As a result, the Tribunal directs the respondent to calculate and pay interest in accordance with the law, considering the applicant's refund application from 5-2-98. The interest payment is to be made within one month, with compliance to be reported to the Tribunal by 26-3-2004.
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