2019 (5) TMI 1096 - AT - Central Excise

Tribunal Awards Interest on Delayed Refund, Citing Legal Precedents for Compensation in Absence of Specific Provision.

The CESTAT New Delhi allowed the Appellant's appeal, granting interest of Rs. 6,84,274 on the delayed refund. The Tribunal set aside the Commissioner's ... Interest on delayed refund of Interest - HELD THAT:- Only because there is no provision for interest on refund of delayed interest that does not mean that there is any bar or prohibition for granting the same. Hon’ble Supreme Court in the matter of Ranbaxy Laboratories Ltd. [2011 (10) TMI 16 - SUPREME COURT] held that the Appellant is entitle to claim interest after three months from the date of filing of refund claim till its realisation. Since again there was inordinate delay in refund of interest to the Appellant therefore the Appellant has to file another refund claim for refund of interest of ₹ 6,84,274/- for delay in refunding the interest to the Appellant on the ground that the interest on delayed refund was immediately payable alongwith the refund amount on 02.08.2012 but was actually paid on 16.07.2015. The prayer of the Appellant for grant of interest on delayed payment of interest is allowed - Appeal allowed - decided in favor of appellant. Issues:- Entitlement to interest on delayed refund amounting to Rs. 6,84,274.Analysis:The Appellate Tribunal CESTAT New Delhi addressed the issue of whether the Appellant is entitled to interest of Rs. 6,84,274 on a delayed refund. The case involved multiple rounds of litigation starting from the filing of the refund claim in 2002, which was initially credited to the Consumer Welfare Fund due to unjust enrichment. The matter was remanded for denovo adjudication, and eventually, the Appellant filed a claim for interest on delayed payment of the refund amount. The Tribunal had previously held that the Appellant is entitled to claim interest after three months from the date of filing the refund claim. Another refund claim for interest of Rs. 6,84,274 was filed due to inordinate delay in refunding the interest amount. The Adjudicating Authority rejected the claim, which was upheld by the Commissioner in the impugned order dated 27.06.2018.The Appellant argued that the interest amount became due in 2012 but was received in 2015, leading to unnecessary expenses in litigation. The Appellant relied on various decisions to support the claim for interest. On the other hand, the Authorised Representative contended that there is no provision for payment of interest on interest amount. The Tribunal noted that the Commissioner rejected the Appeal citing that the interest granted by the Tribunal on delayed payment of refund was subjudice and had not attained finality. The Tribunal also highlighted that the Appellant faced inordinate delay in receiving the legitimate interest claim. Referring to legal precedents, including decisions by the Supreme Court and the Gujarat High Court, the Tribunal emphasized that the Revenue is liable to pay interest on the amount of interest unjustifiably withheld from the assessee.The Tribunal distinguished the decisions cited by the Authorised Representative and found the decision in Kerala Chemicals Ltd. applicable to the present case. It emphasized that the absence of a provision for interest on delayed interest does not prohibit its grant. Relying on the legal principles established by the Supreme Court, Gujarat High Court, and a coordinate Bench of the Tribunal, the Tribunal allowed the Appellant's prayer for interest on delayed payment of interest, setting aside the impugned order of the Commissioner. Consequently, the Appeal was allowed, and the Appellant was granted the interest amount of Rs. 6,84,274.