UNION OF INDIA Vs. DEO NARAIN

JUDGEMENT

(1.) Leave granted.

(2.) Challenge in this appeal is to the judgment of a Division Bench of the Gujarat High Court directing grant of interest to the respondent for alleged delayed refund of amount payable under Central Excise Act, 1944 (in short the Act) and Central Excise Rules, 1944 (in short the Rules).

(3.) Background facts are undisputed and are essentially as follows : Refund was claimed by the respondent before the Assistant Commissioner, Central Excise and Customs Division IV, Vadodara, for refund of Rs. 2,50,494.31. The applications which were filed under Rule 173L of the Rules were rejected by the Assistant Commissioner by order dated 24.7.1991. Being aggrieved by the said order, respondent preferred an appeal before the Commissioner of Appeal, Mumbai who remitted the matter for de novo consideration. After hearing the respondent, the said applications were again rejected. Respondent again preferred an appeal on 21.5.1996 before the Commissioner of Appeal which was dismissed by order dated 31.8.1998. Being aggrieved by the said order, the respondent preferred an appeal before the Customs, Excise and Gold Control Appellate Tribunal, West Regional Bench (in short the CEGAT). By order dated 25.11.2003 CEGAT allowed the appeal and inter alia held as follows :