The Hindu Business Line : Pay interest to assessees on delayed refunds, HC tells Excise Dept

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Pay interest to assessees on delayed refunds, HC tells Excise Dept

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Chennai, Dec. 10 The Central Excise Department, Tirunelveli, has been directed by the Madurai Bench of the Madras High Court to pay interest at 14 per cent on pre-deposit money collected from two Tirunelveli-based firms. Since the amount had been collected ‘forcefully’ from the writ petitioners, they were entitled to getting interest, ruled Mr Justice K. Chandru.

The two firms, in their petitions, contended that the Preventive Unit headed by Assistant Commissioner of Central Excise, paid a surprise visit to their factory premises and conducted verifications and seized certain documents regarding production and clearance of PVC pipes under a mahazar dated 3-9-2002.

It was submitted that the investigation did not fructify in resulting in any levy of excise duty or penalty on the basis of any wrong disclosure.

After knowing that no further action would be taken by the department in respect of the seizures, petitioners claimed refund on 23-11-2005 and respondent (Assistant Commissioner, Central Excise) had also sanctioned the refund amount.

The petitioners demanded payment of interest on the pre-deposit amount totalling Rs 10 lakh, but the request was rejected by respondent.

The Judge said that under Section 11-BB of Central Excise Act, 1944, if any duty was ordered to be refunded under Section 11-B(2), and money was not refunded within three months from date of application for refund, assessees should be paid interest at prescribed rate. The respondent denied there was any delay in refunding the amount, and hence no interest was payable.

The date for calculation of interest must be arrived at from the first application made by petitioners, viz. on 2-9-2003, and rate of interest was as notified by Central Government, which was 14 per cent.

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