2026 (1) TMI 387 - AT - Central Excise

Interest claim on bank-held sanctioned refund amid unjust enrichment dispute; denied while refund must go to Consumer Welfare Fund.

Interest on the sanctioned refund amount kept in a bank was sought. The Tribunal held that entitlement to interest is contingent on the substantive ... Denial of interest accruing on the amount of refund sanctioned that was deposited in the bank - principles of unjust enrichment - whether the amount of refund that was sanctioned has to be paid to the appellant or deposited in the Consumer Welfare Fund had earlier been decided by the Commissioner holding that it would have to be deposited in the Consumer Welfare Fund? - HELD THAT:- The present appeal has been filed against that part of the order passed by the Commissioner (Appeals) refusing to grant interest to the appellant on the amount of Rs.9,69,12,799/- deposited in the bank pursuant to the order by the Rajasthan High Court. Grant of interest to the appellant would depend on whether it is the appellant which has to receive the refund amount or the amount has to be deposited in the Consumer Welfare Fund. At the moment there is an order of the Commissioner against the appellant and unless that order is set aside and an order is passed that the amount has to be paid to the appellant, interest cannot be paid to the appellant. It is therefore not necessary to keep this appeal pending any longer. It is for the appellant to take appropriate steps for getting a decision on the issue as to whether the principle amount of Rs.9,69,12,799/- has to be refunded to the appellant or it has to be deposited in the Consumer Welfare Fund. The appellant can get interest only if it is held that the refund amount has to be paid to the appellant. Appeal disposed off. Issues: Whether the appellant is entitled to interest on the amount of Rs.9,69,12,799/- deposited in a bank pending determination of whether the refund principal should be paid to the appellant or credited to the Consumer Welfare Fund.Analysis: The Tribunal considered the procedural and substantive history: duty was paid under protest, a refund was initially sanctioned but the department raised the plea of unjust enrichment; the matter traversed orders of the Tribunal and the Supreme Court and was remitted for fresh consideration. The Commissioner held that the amount of Rs.9,69,12,799/- is hit by unjust enrichment and directed credit to the Consumer Welfare Fund. The appeal against that order was disposed with liberty to the appellant to pursue the pending writ before the High Court; consequently, the entitlement to interest depends on the ultimately concluded question whether the principal refund is payable to the appellant. Pending a final determination restoring the appellant's right to the principal amount, interest cannot be awarded to the appellant.Conclusion: The appellant is not entitled to interest on Rs.9,69,12,799/- unless and until a final order is passed holding that the principal refund amount is payable to the appellant rather than to the Consumer Welfare Fund; decision is therefore against the appellant and in favour of the Revenue.