2005 (9) TMI 387

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.... None, for the Respondent. [Order]. - Being aggrieved with the order passed by Commissioner (Appeals) granting respondent's claim of interest on the refunded amount, revenue has filed the present appeal. I have heard ld. DR. Nobody is present for the respondent and have made a prayer to decide on merits. 2. As per facts on record, respondent assessee was having two units i.e. unit No....

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....y in terms of provisions of Section 11BB. Revenue has challenged the said order on two grounds First, that the order of refund itself has not been accepted and an appeal there against has been filed before Commissioner (Appeals). Secondly that the refund to plant I was in the nature of regularization of credit which could be done only after adjudication of show cause notice issued for recovery of ....

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....I. Had they not used the said credit the same would have been simply lying unutilised in the Modvat account of the said unit and would not have earned any interest. Alternatively, unit No. I would have utilised the same for its own clearances. However, it is not the assessee (Unit No. I) case that during the said period they have paid duty out of PLA instead of utilising the credit. In fact, it is....

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.... having concluded that interest is not to be paid. I may observe in the passing that by not paying duty out of PLA at the relevant time, assessee has deprived the exchequer of its legitimate dues. Duty has been paid from PLA only subsequently. It is not clear as to whether any interest was demanded and paid on the said delayed deposit of duty from PLA. If no interest was paid on the subsequent pay....