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Issues: (i) Whether the assessee was entitled to interest on refunded duty after the expiry of three months from the date of filing the refund claim; (ii) Whether the communication issued by the Assistant Commissioner rejecting interest could be treated as an appealable order.
Issue (i): Whether the assessee was entitled to interest on refunded duty after the expiry of three months from the date of filing the refund claim.
Analysis: The refund claims had remained pending for a prolonged period and the refund entitlement was ultimately settled in favour of the assessee. The governing rule applied was that interest becomes payable when refund is not sanctioned within the statutory period, and the relevant principle was treated as settled by the Supreme Court in relation to delayed refund claims.
Conclusion: The assessee was entitled to interest on the refunded amount after three months from the date of filing the refund claim.
Issue (ii): Whether the communication issued by the Assistant Commissioner rejecting interest could be treated as an appealable order.
Analysis: The communication affected the assessee's right to claim interest and was not merely a clerical or administrative intimation. A communication that determines civil consequences and impacts the assessee's rights is capable of being challenged in appeal.
Conclusion: The communication was an appealable order and the contrary view was incorrect.
Final Conclusion: The appeal succeeded and the assessee's claim for interest on delayed refund was upheld in accordance with law.
Ratio Decidendi: Interest on refund becomes payable where the refund is not sanctioned within the statutory period, and a departmental communication that finally determines the assessee's entitlement and affects its rights is appealable.
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