Interest on delayed refunds: appellate orders direct interest payable to appellant where principal refund is paid to appellant.

Where appellate orders adjudicated the principal refund payable to the appellant and rejected diversion to the Consumer Welfare Fund as unjust enrichment, the appellant is entitled to statutory interest on the delayed refund; the legal basis is that entitlement to interest follows the adjudicated right to the principal and prior diversion grounds having been set aside. Consequently the impugned order is set aside to the extent that interest must be credited to the appellant and paid in accordance with law for the specified refund applications.

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Issues: Whether the appellant is entitled to payment of interest in respect of the principal refund amounts already sanctioned to it by the Tribunal instead of the interest being credited to the Consumer Welfare Fund.

Analysis: The question turns on entitlement to interest where the principal refund has been directed to be paid to the appellant rather than credited to the Consumer Welfare Fund. Earlier orders had diverted sanctioned principal to the Consumer Welfare Fund on a presumption of unjust enrichment, and interest was accordingly not credited to the appellant. Subsequent appellate decisions set aside the direction to credit the principal to the Consumer Welfare Fund and ordered the principal to be paid to the appellant; in one connected refund the Commissioner (Appeals) explicitly directed that interest, if payable as per law, shall be paid to the appellant. Given that the principal has been adjudicated to be payable to the appellant and the ground for diversion (unjust enrichment) has been rejected by the appellate forum, the legal entitlement to interest on delayed refund follows the payment of the principal as determined by the appellate orders.

Conclusion: The appeals are allowed and the appellant is entitled to payment of interest in accordance with law on the principal amounts already sanctioned for the specified refund applications; the impugned order is set aside to that extent (interest to be credited to the appellant).

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