2007 (7) TMI 272 - AT - Central Excise

CESTAT Upholds Interest on Delayed Refund Payments

The Appellate Tribunal CESTAT, NEW DELHI upheld the Commissioner (Appeals)'s order allowing interest on delay in payment of a refund claim. The Tribunal ... Interest on delayed refund – relevant date - LB decision in the case of Rama Vision Ltd. is applicable herein where it was held that interest required to be paid from the date immediately after expiry of three months from the date of receipt of refund application till date of refund - held that respondent filed documentary evidence in respect of refund claim on 13-12-1999, they will be eligible to get interest with effect from 30-3-2000 onwards till the date of payment of refund amount Issues:- Appeal against the impugned order allowing interest on delay in payment of refund claim- Interpretation of the date from which interest on refund claim should be calculatedAnalysis:The judgment from the Appellate Tribunal CESTAT, NEW DELHI involves an appeal filed by the revenue against an order allowing interest on delay in payment of a refund claim. The Commissioner (Appeals) had ruled that the respondent, who filed documentary evidence for the refund claim on a specific date, would be entitled to interest from a later date. The Tribunal referred to the decisions in the cases of Rama Vision Ltd. v. CCE and CCE v. Movilex Irrigation Ltd., which established that interest should be paid from the date immediately after three months from the refund application until the refund payment date. The Tribunal rejected the revenue's argument based on the decision in Indian Thermoplastics (P.) Ltd v. Commissioner of Customs, emphasizing that the Rama Vision Ltd. decision applied to the present case. Consequently, the Tribunal upheld the Commissioner (Appeals)'s order, rejecting the revenue's appeal and disposing of the cross objection.In conclusion, the judgment clarifies the calculation of interest on a refund claim, emphasizing the starting point for interest payment based on established precedents. The decision highlights the importance of adhering to relevant case law in determining the entitlement to interest on delayed refund payments, ensuring consistency in such matters.