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2011 (9) TMI 868 - AT - Central ExciseInterest on delayed refund - Unjust enrichment - Held that - claim for refund was filed on 26-3-2002 and the legal position is that the three months period for grant of refund is to be calculated from the date of making an application for refund and not from the date of sanction subsequently. This is the view taken by the Tribunal in several cases including that of the same assessees as seen from - 2008 (3) TMI 191 - CESTAT, CHENNAI . Since the refund was sanctioned only in Oct. 10, while the claim for refund was made on 26-3-2002, there is no dispute that there is an inordinate delay in grant of the refund, thereby justifying the assessee s claim for interest on the refund amount for the period from 26-6-2002 to 29-10-2010 (i.e., from the expiry of three months from the date of filing the refund claim till the date of payment). I, therefore, set aside the impugned order as I hold that the assessees are entitled to interest for the period from 26-6-2002 to 29-10-2010 - Decided in favour of assessee.
Issues:
Claim for interest on account of delayed refund. Analysis: The judgment pertains to a claim for interest on a delayed refund. Initially, duty demand was confirmed against the assessees for 'Grey Tyre Cord Fabrics' used in the manufacture of 'Dipped Tyre Cord Fabrics'. The demand was set aside in 1998, and a refund claim was filed in 2002, which was rejected as time-barred and on the grounds of unjust enrichment. The Tribunal dismissed the Revenue's appeal against the Commissioner's order. Subsequently, the assessees appealed against the rejection of the refund claim. The Commissioner (Appeals) set aside the unjust enrichment finding. In 2010, the Tribunal allowed the appeal, directing the grant of consequential benefits. However, the refund was sanctioned without interest, leading to an appeal against the non-grant of interest. The judge noted that the claim for refund was filed in 2002, and the legal position mandates calculating the three months' period for refund from the date of the refund application, not the date of subsequent sanction. Citing precedents, the judge emphasized the inordinate delay in refund grant, justifying the assessees' claim for interest from June 2002 to October 2010. Consequently, the impugned order was set aside, ruling in favor of the assessees' entitlement to interest for the mentioned period. The judge stressed the importance of promptly paying the interest amount due to the prolonged pendency of the matter. In conclusion, the judgment resolves the issue of interest on delayed refund, highlighting the significance of calculating the refund period from the date of application and not the sanction date. The assessees were deemed entitled to interest due to the substantial delay in refund processing, emphasizing the need for prompt payment of the interest amount.
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