Operative appellate order can compel duty refund; proposed appeal alone does not justify withholding refund or interest.

Where an appellate tribunal's order remains operative and no stay has been obtained, the department cannot withhold recalculation of duty or refund of excise duty merely because it proposes to appeal. The Madras High Court also accepted that the refundable amount could carry interest, and directed payment of interest at 18% from the date of collection until actual refund. The reasoning emphasised that consequential relief follows an effective appellate order unless its operation is lawfully suspended, and that interest may be granted on refunded sums in appropriate revenue matters.

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Issues: (i) whether, in the absence of any stay of the appellate tribunal's order, the department was bound to recalculate the duty demand and grant refund of excise duty to the assessee; (ii) whether interest at 18% was payable on the refundable amount from the date of collection till actual payment.

Issue (i): Whether, in the absence of any stay of the appellate tribunal's order, the department was bound to recalculate the duty demand and grant refund of excise duty to the assessee.

Analysis: The tribunal had already set aside the penalty and directed recalculation of duty demand with consequential relief. The department's assertion that steps were being taken to file an appeal before the Supreme Court was not treated as sufficient, because no appeal or stay was shown to have been obtained. Mere pendency of proposed appellate action was held not to justify withholding refund.

Conclusion: The department was directed to recalculate the duty demand and grant refund of excise duty to the assessee.

Issue (ii): Whether interest at 18% was payable on the refundable amount from the date of collection till actual payment.

Analysis: The claim for interest was considered in the light of the facts and circumstances of the case and the existence of interest provisions in other revenue enactments. On that basis, the Court accepted that the refunded amount should carry interest.

Conclusion: Interest at 18% was held payable on the refundable amount from the date of collection till the date of actual payment.

Final Conclusion: The writ petition succeeded and the assessee obtained relief both on refund and on interest.

Ratio Decidendi: Mere proposal to file an appeal does not justify withholding refund of duty when the appellate order remains operative and no stay has been obtained; consequential refund may also carry interest where the circumstances so warrant.

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