L AND T LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE claim in this appeal of Larsen and Toubro Limited is for payment of interest.

(2.) THE appellant had imported certain machinery in 1996 and claimed certain exemption. A bank guarantee was executed in January, 1997. Under order of adjudication dated 13 -12 -99, the appellant's claim for exemption was rejected. The bank guarantee filed by the appellant was encashed and an amount of about Rs. 1.05 crore was realised on 10 -5 -2000. The appellant filed an appeal against the order of adjudication, along with stay application. When the stay application came up for hearing before the Commissioner (Appeals), it was submitted that an amount of over Rs. 1.05 crores already remained realised through the encashment of the bank guarantee and Commissioner (Appeals) waived the requirement for further pre -deposit and heard the appeal. The appeal was subsequently allowed under an order dated 28 -9 -2000 (issued on 3 -10 -2000). The appellant filed refund application on 8 -12 -2000 claiming the return of the amount realised in terms of the bank guarantee. The Revenue filed an appeal before this Tribunal against the order of the Commissioner (Appeals), along with stay application. The stay application was rejected vide order dated 2 -2 -2001. Later, the appeal of the Revenue was rejected under order dated 23 -3 -2001. The refund application of the appellant was allowed on 6 -9 -2001 without granting any interest. The appellant filed an appeal before the Commissioner (Appeals) seeking payment of interest, for the period from three months from the date of allowing of their appeal by Commissioner (Appeals). That appeal was rejected by the Commissioner with the following observation in para 7 of the order :

(3.) THE contention of the learned Counsel for the appellant is that the claim for interest was required to be settled in terms of the judgment of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Hyderabad v. ITC Ltd., reported in 2005 (179) E.L.T. 15 (S.C.) wherein the Hon'ble Supreme Court has observed that interest will be payable in terms of the circular issued by the Revenue. A copy of that circular, bearing No. 802/35/2004 -CX, dated 8 -12 -2004 was also annexed to the judgment. It is the submission of the learned Counsel that the circular specifically has held that in respect of final orders, amounts pre -deposited must be returned within three months from the date of the order passed by the appellate authority, failing which interest will be payable. Reliance has specifically been placed on 3 and 4 paras of the circular. We reproduce these paras :