2013 (6) TMI 269 - HC - Central Excise

High Court Upholds Interest on Predeposit Appeal, Affirms Circular 802/35/2004-CX

M/s VPI. (P) Ltd. Versus Commissioner, Central Excise, Allahabad

The Allahabad High Court dismissed the appeal under section 35-G of the Central Excise Act, upholding the decision of the Customs, Excise and Service Tax ... Interest on delayed refund of pre-deposit - selection of date - Held that:- The Tribunal has allowed the interest to the appellant immediately after three months period from passing the order of the Tribunal. The order of Tribunal was passed on 31st of March, 2000 and interest has been allowed from 1st July, 2000. Thus, the order of the Tribunal is fully in accord with the circular No. 275/37/2000-CX.8A dated 02.01.2002 as approved in Commissioner of Central Excise, Hyderabad Vs. ITC Ltd [2004 (12) TMI 90 - SUPREME COURT OF INDIA]. The submission of the appellant that he is entitled for payment of interest from the date of deposit cannot be accepted. Issues:- Appeal under section 35-G of the Central Excise Act against the judgment and order passed by the Customs, Excise and Service Tax Tribunal.- Claim for payment of interest on predeposit made before the Commissioner (Appeals).- Application for refund of five lakhs of rupees rejected by the adjudicating authority.- Appeal partly allowed for refund of Rs.5 Lakhs by the Commissioner (A).- Interpretation of the date from which interest on refund should be granted.- Compliance with circular no.802/35/2004 - CX dated 08-Dec-2004 regarding refund of pre-deposits within three months from the date of order passed by the Appellate Tribunal.Analysis:The judgment by the Allahabad High Court pertains to an appeal under section 35-G of the Central Excise Act against a decision by the Customs, Excise and Service Tax Tribunal. The Tribunal had allowed the appellant's appeal for the payment of interest on a predeposit made before the Commissioner (Appeals). The appellant had filed an application for a refund of five lakhs of rupees, which was initially rejected but later partly allowed by the Commissioner (A) resulting in the refund being granted. The key issue was the date from which interest on the refund should be granted.The appellant contended that interest should be paid from the date of predeposit. The court referred to a circular issued on 8.12.2004, which specified that pre-deposits must be refunded within three months from the date of the order passed by the Appellate Tribunal. The Tribunal, in this case, had allowed interest to the appellant after three months from its order date, in accordance with the circular approved by the Apex Court. Therefore, the court dismissed the appellant's submission that interest should be paid from the date of deposit, stating that the Tribunal's decision aligned with the circular.The court emphasized that no substantial question of law arose for consideration and subsequently dismissed the appeal. The judgment underscores the importance of complying with circulars regarding the refund of pre-deposits within a specified timeframe following the disposal of appeals in favor of the assessee.