ARTI STEEL LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) MISC . Application No. 165/2001 was filed by the appellant in Appeal No. 2468/97 -NB under Rule 41 of the CEGAT (Procedure) Rules, 1982 for direction to return the amount of pre -deposit to the applicant with interest from the date of deposit till the date of refund. Misc. Application No. 234/2001 is one requesting for early posting of the Misc. Application No. 165/2001. Misc. Application No. 127/2003 filed on 16 -4 -2003 is for permission to withdraw the earlier application as pre -mature since refund was sanctioned on 17 -7 -2001. When these applications were taken up on 1 -5 -2003 it was admitted on behalf of the applicant that they have received the refund of an amount of Rs. 15 lakhs on 17 -7 -2001 without any interest. It is further submitted that the Misc. Application No. 127/2003 has to be understood as withdrawing their request for refund as it was already sanctioned on 17 -7 -2001 but their claim for interest has not been withdrawn.

(2.) LEARNED Senior Counsel, Shri A.N. Haksar appearing on behalf of the respondent submits that according to the Department no interest is payable when refund of pre -deposit is made unlike in the case of duty refund. He also submitted that since the applicant had sought permission to withdraw its claim for refund under Misc. No. 127/2003 they cannot be heard to contend now that they are entitled to interest on refund of pre -deposit.

(3.) WE do not find any merit in the contentions raised on behalf of the Revenue. Merely because in the Misc. Application 127/2003 which was filed after the receipt of refund of pre -deposit on 17 -7 -2001, there is a request for withdrawing the application we do not find any reason to deny the interest to the applicant and at the time of hearing it was submitted on behalf of the applicant that they are not withdrawing their claim for interest. The question whether appellants are entitled to claim interest on refund of pre -deposit has already been decided by the Apex Court in Kuil Fireworks Industries v. CCE - 1997 (95) E.L.T. 3 (S.C.). In a recent decision of the Calcutta High Court in Eastern Coils Pvt. Ltd. v. CCE, Calcutta - 2003 (153) E.L.T. 290 this aspect has been specifically considered and the contention raised by the Revenue that no interest on refund of pre -deposit is liable to be paid as pre -deposit made cannot be treated as illegal recovery of money on account of statutory claim. Therefore, when such refund is made the Revenue cannot be compelled to pay interest. The Calcutta High Court was not inclined to agree with the above contention. Under these circumstances we direct the Revenue to pay interest on the amount of Rs. 15 lakhs refunded on 17 -7 -2001. For the purpose of the period during which interest is liable and also for the rate at which it has to be calculated we will adopt the provisions contained under Section 11BB. The applicant will be entitled to interest at the rate prescribed under Section 11BB for the period from the date of expiry of three months after the date of application for refund till the date of payment. The payment shall be made within one month from the date of receipt of this order.