Interest on wrongfully collected excise duty can be awarded as compensation for continued retention of money without lawful authority.

Interest may be payable on excise duty recovered without authority of law and retained for an extended period, because such interest operates as compensation for the use of another's money. The absence of an express statutory or rules-based provision does not necessarily bar relief where the underlying levy itself was unauthorized and the Department continued to hold the amount. The equitable principle requiring public bodies to restore money wrongly collected supported an award of interest at 12% per annum from the date of collection until actual refund.

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Issues: Whether the assessee was entitled to interest on excise duty recovered and retained without authority of law, and if so, at what rate and for what period.

Analysis: The duty had been collected on a basis later held to be without jurisdiction, and the refund was made only after a substantial delay. Interest was treated as compensation for the use or retention of another's money. The absence of an express provision in the statute or rules was not accepted as a bar where the levy itself was unauthorized and the Department had retained the amount for a long period. The equitable principle that public bodies must restore money wrongly recovered supported award of interest.

Conclusion: The assessee was entitled to interest at 12% per annum from the date of collection of the amount until the date of actual refund.

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