The Meghalaya High Court directed the department to Pay Interest on delayed refund in Green Valley Industries Case.
Facts
The legal issue that has arisen here is as to whether the respondent assessee was entitled to any interest on the delayed refund made by the Department. There is no doubt that Section 11B of the Central Excise Act, 1944 does not provide for any payment of interest for refund of duty or interest. However, the moot question here is whether the refund that the respondent assessee was found liable to be was on account of excess duty or interest paid.
Decision
The division bench of The Chief Justice Sanjib Banerjee and Justice W. Diengdoh noted that the Department had no quarrel with the quantum of refund as directed to be made by the Tribunal. It is also the admitted position that the amount has been refunded.
The court observed that since interest is a mode of compensation, it may not always pass muster to delay the payment that is due and claim that notwithstanding the reasons for the delay or the extent of delay, no interest on interest can ever be payable.
The bench ordered that the Department would do well to make the payment of the interest due. If the payment is made within such time, there will be no further claim of the assessee in respect of this matter. Otherwise, the assessee will be entitled to pursue any further remedy available in accordance with law.
Case title: The Principal Commissioner of Central Goods and Service Tax v/s M/s Green Valliey Industries Pvt Ltd
Citation: MC (Central Excise Ap.) No. 1/2023 in Central Excise Ap.No.4/2023
