Tribunal orders full cash refund for excess duty paid, interest not payable on interest

The Tribunal granted the appellant's claim for refund of excess duty paid, directing the refund to be made in full by cash due to the appellant's status as a small scale unit and inability to utilize the credit. The Tribunal held that interest on interest is not payable under the Central Excise Act, and interest on the refund is due only after the introduction of the relevant provision. The amount collected without authority of law should be restored with interest after three months of the provision's availability.

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Issues:
1. Claim for refund of excess payment of duty.
2. Payment of interest under Section 11 BB of the Central Excise Act, 1944.
3. Eligibility for interest on delayed payment of interest.
4. Refund in full by cash for small scale unit.
5. Restoration of amount collected without authority of law.
6. Crediting refund amount in cenvat account.

Analysis:

1. Claim for refund of excess payment of duty:
The appellants, engaged in the manufacture of oxygen and ethylene gas, filed a claim for refund of excess duty paid in the year 1988-89. The refund was sanctioned by the Original Authority, with a portion paid by cheque and the rest credited in the cenvat account. The appellants appealed against this order, leading to the present appeal.

2. Payment of interest under Section 11 BB of the Central Excise Act, 1944:
The ld. Commissioner (Appeals) ordered for payment of interest under Section 11 BB from 27.08.1995 till the date of refund. However, he held that no interest is payable on the delayed payment of interest. The Tribunal found that interest on refund was introduced in the law only on 26.05.1995, and there is no provision for payment of interest on interest.

3. Eligibility for interest on delayed payment of interest:
The appellant claimed interest on the delayed payment of interest, arguing that the amount collected without authority of law should be restored back to them with interest from the date of improper recovery. However, the Tribunal held that there is no provision for interest on interest in the Central Excise Act.

4. Refund in full by cash for small scale unit:
The appellant contended that as a small scale unit, they should have received the refund in full by cash, as they were not able to utilize all the credit in their accounts. The Tribunal agreed, noting that the refund should be given in cash if the appellant is unable to utilize the credit.

5. Restoration of amount collected without authority of law:
The appellant argued that the amount claimed as refund was collected and retained by the Department without authority of law, and should be restored back to them with interest. The Tribunal found that there is no provision for interest prior to 27.08.1995, and the interest shall be due after 3 months of the availability of such provision.

6. Crediting refund amount in cenvat account:
The Tribunal found that the appellants, operating under a small scale exemption scheme, should receive the refund in cash as they were not in a position to utilize the credit. The Tribunal modified the impugned order to grant the refund in cash, considering the appellants' inability to utilize the credit effectively.

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