Appeal allowed as Apex Court judgment supersedes Larger Bench decision on interest payment.

The appeal was filed against an Order-in-Appeal by the Commissioner of Customs & Central Excise (Appeals), Hyderabad, regarding payment of interest on delayed payment of interest. The Larger Bench of CESTAT overruled the Hindustan Motors case, but the Tribunal found that the Apex Court judgment should prevail. The Tribunal emphasized that the Apex Court's decision supersedes the Larger Bench decision, leading to the appeal being allowed with consequential relief on 7-1-2008.

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Issues:
1. Interpretation of the Supreme Court ruling on payment of interest on delayed payment of interest.
2. Conflict between the Larger Bench decision and the Apex Court judgment.
3. Applicability of the Apex Court judgment over the Larger Bench decision.

Analysis:
1. The appeal was filed against an Order-in-Appeal passed by the Commissioner of Customs & Central Excise (Appeals), Hyderabad. The Bench directed the Commissioner (Appeals) to give a finding on the submission of the appellant regarding payment of interest on delayed payment of interest in light of a Supreme Court decision. The Commissioner (Appeals) referred to judgments of Sandvik Asia Ltd. and Hindustan Motors, stating that interest on interest wrongfully withheld must be paid, even without a statutory provision. The Larger Bench of CESTAT overruled the Hindustan Motors case, emphasizing the payment of interest on delayed payment of interest. The Commissioner (Appeals) concluded that without a provision in the Central Excise Act, he couldn't sanction interest on delayed payment of interest, leading to the appeal being rejected.

2. The appellant's representative argued that the Apex Court judgment should prevail over the Larger Bench decision. They contended that the Larger Bench did not address the Apex Court judgment, making the impugned order erroneous. The Departmental Representative referred to a Bombay High Court case and the Apex Court's decision in Sandvik Asia Ltd., highlighting the issue of interest on interest. The appellant claimed that the Bombay High Court decision was overruled by the Apex Court, awarding interest on interest despite the absence of statutory provisions. The Tribunal found that the Commissioner (Appeals) erred in ignoring the Supreme Court ruling and following the Larger Bench decision based on the Bombay High Court's decision. The Tribunal agreed that the Apex Court's decision should prevail, leading to the appeal being allowed with consequential relief.

3. The Tribunal emphasized that the Apex Court's decision supersedes the Larger Bench decision. They noted that the Tribunal's previous decision also relied on the Apex Court judgment. Therefore, the Tribunal concluded that the Apex Court's decision should be followed over the Larger Bench decision, ultimately allowing the appeal with consequential relief. The judgment was pronounced on 7-1-2008.

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