Commissioner grants interest on refunded amount pre-Section 11BB, dismissing revenue's appeal.

The Commissioner (Appeals) allowed the appeal, determining that the appellants were entitled to interest on a refunded amount as the refund application was submitted before the enforcement of Section 11BB of the Central Excise Act, 1944. The court rejected the revenue's argument that the bank guarantee encashment did not fall under Section 11BB, emphasizing that the nature of the amount did not impact the applicability of interest provisions post-refund. Consequently, the revenue's appeal was dismissed, affirming the appellants' right to interest on the refunded sum.

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Issues:
1. Dispute over interest amount on refund sanctioned by original adjudicating authority.

Analysis:
The judgment pertains to a dispute involving interest amount in relation to a refund sanctioned by the original adjudicating authority. The respondents were involved in the manufacture of HDPE tapes from HDPE granules, with a dispute on product classification settled in their favor. The revenue had encashed a bank guarantee during the pendency of the dispute, which was later claimed as a refund by the respondents. The Assistant Commissioner sanctioned the refund but denied interest under Section 11BB of the Central Excise Act, 1944. On appeal, the Commissioner (Appeals) allowed the appeal, stating that the appellants were entitled to interest since the refund application was made before the enforcement of Section 11BB. The judgment emphasized that the revenue's argument regarding the bank guarantee encashment not falling under Section 11BB was unfounded, as the nature of the amount (bank guarantee or cash deposit) did not affect the applicability of interest provisions once the refund was made. Therefore, the appeal by the revenue was rejected, affirming the entitlement of the appellants to interest on the refunded amount.

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