High Court Upholds Tribunal Decision on Interest Payment Dispute

The High Court dismissed the Department's appeal, affirming the Tribunal's decision to set aside the demand for payment of interest. The appellant's entitlement to a refund was finalized, with the Tribunal ruling in favor of the appellant. The Tribunal held that the refund claims were not time-barred, emphasizing that the relevant date for filing was the date of the final judgment by the High Court. Consequently, the Tribunal allowed the appeals, granting the appellant consequential relief as per law.

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Issues:
Refund of interest amount under protest denied by the Commissioner (Appeals) challenged in the appeal.

Analysis:
The appellant challenged the denial of the refund of interest amount of Rs. 6,36,889/- paid under protest in the appeal. The demand for Rs.16,89,669/- along with interest and penalty was confirmed by the Adjudicating Authority, leading to a Memorandum-cum-notice of demand for non-payment of interest issued to the appellant. The appellant paid the interest under protest after a defaulter notice was issued. The Tribunal allowed the appeal filed by the appellant, setting aside the demand. The Department's appeal against the Tribunal's order was dismissed by the Hon'ble High Court, finalizing the appellant's entitlement to the refund.

The appellant filed a refund claim of duty on 19.2.2018, which was denied as time-barred by the Commissioner (Appeals). However, the Tribunal, in another case, allowed a similar refund claim, emphasizing that the relevant date for filing the refund claim is the date of the final judgment that finalizes the entitlement to the refund. The Tribunal held that the refund claim filed on 19.02.2018 was within one year of the final judgment by the High Court, making it timely.

Similarly, the appellant filed a refund claim of interest on 16.5.2017, which was also denied as time-barred. The Tribunal found that the payment of interest was made under protest after a notice of demand was issued, making it a non-voluntary payment. The Tribunal clarified that the relevant date for filing the refund claim is the date of the High Court's final judgment, not the date of the Tribunal's order. The Tribunal allowed the appeal, stating that the rejection of the refund claim as time-barred was unjustified.

In conclusion, the Tribunal allowed the appeal filed by the appellant, granting consequential relief as per law. The order was pronounced in the open court on 15.09.2022.

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