In Excise Appeal No. 60394 Of 2022 - CESTAT - CESTAT (Chandigarh) grants interest on delayed payment of refund claim to Champion Flavours
Member S.S. Garg (Judicial) [29-05-2023]

Read Order: Champion Flavours, Meerut v. Commissioner CGST, Jammu

Chahat Varma

New Delhi, June 3, 2023: The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal has allowed the appeal filed by Champion Flavours, Meerut (appellant), ruling that the appellant was entitled to receive interest on the delayed payment of the refund claim from 27.01.2011 until the date of credit to the appellant's account and the interest was to be calculated at the rate of 6% as per the statute.

Factual matrix of the case was that the appellant was engaged in the manufacturing of Menthol, Menthol Crystal’s and DMO and was availing area-based exemption under Notification No. 56/2002 dated 14.11.2002.  A show cause notice was issued to the appellant alleging that they were not engaged in physical manufacturing of goods. An order-in-original was passed, proposing recovery of a refund of self-credit amount. The appellant filed an appeal before the Tribunal, which was allowed, and they deposited a pre-deposit during the appeal process. The appellant filed a refund claim, which was partially sanctioned by the Respondent. However, interest on the delayed payment of the refund claim was not granted. The appellant appealed against this decision to the Commissioner (Appeals), Jammu, but their appeal was rejected.

The bench of S.S. Garg (Judicial) held that the appellant was entitled to interest on the delayed refund in view of the judgement of the Apex Court in the case of Ranbaxy Laboratories Ltd. vs. UOI [LQ/SC/2011/1411].