The applicant is entitled to interest at 12% p. a. from the date of collection of the excise duty till the date of actual payment.

( 1 ) AMONGST many others, one of the commandments of dharma is that if you borrow any money from another for a particular period then it must be returned as agreed to, but if retained beyond that period, then it should be returned with interest. This principle equally applies to the public bodies, Govt. Institutions who under the guise of the public laws recover people s moneys, later discovered to be erroneous levies, then they must return the same and at the same time compensate the citizen for the unauhorised use of his money. A similar situation has arisen in the present application.

( 2 ) THE facts being admitted need not be debated. The applicant M/s Redihot Electricals are manufacturers of domestic electrical appliances. These electrical applicances are chargeable to excise duty under tariff item No. 33-C. Ad valorem excise duty is chargeable on the value of appliances and the same is to be determined under Section 4 (a) of the Central Excise and Salt Act, 1944.

( 3 ) THE applicant had filed their list of prices of the various appliances with the excise authorities. That list stands approved. The goods were being cleared on payment of excise duty as per the approved list. It appears that on 3rd of December, 1974 two demand notices were issued to the applicant, under Rule 10 of the Central Excise Rules, 1944. The case of the excise authorities was that the excise duty was not payable on the wholesale price received by the applicant from its buyers but was payable on the price on which the goods manufactured by the applicants were sold by its buyers. The applicants contested the demand notices by taking numerous pleas but without success. In appeal, the appellate authority held that :-

"the appellants manufacture appliances bearing brand name on behalf of M/s Racold and M/s Killick and, therefore, Central excise duty should be paid on these goods on the basis of the prices at which these are sold by M/s. Racold and M/s. Killick. "the applicants made the payments from their meagre resources, and by taking overdraft from its bankers, on which the substantial amounts by way of interest.

( 4 ) THE applicants challenged the finding of the appellate authority by way of filing a writ petition. By order dated August, 29, 1985, Yogeshwar Dayal, J. (as his Lordship then was) concluded thus :-

"there was no question of any short levy in the circumstances and, therefore, the notices issued under Rule 10 of the Central Excise Rules, 1944 were without jurisdiction and demands were totally unauthorised. I would accordingly quash the impugned orders, notices earlier by the Assistant Collector of Central Excise and Appellate Collector, Central Excise. "the petitioner was allowed costs which were assessed at Rs. 2000. 00.

( 5 ) SUBSEQUENT to the passing of the abovesaid order, the applicant vide its letter dated 25th January, 1986 requested the Assistant Collector to refund the excess duty paid. Their two subsequent reminders elicited no response, The personal visits to the office of the respondents, however, bore fruit The Assistant Collector alongwith his letter dated 17th August, 1987 sent a cheque for Rs. 1,60,468. 51 by way of refund of excise duty. This refund payment admittedly was made more than 2 years after the order of this Court.

( 6 ) HOWEVER, as no interest on the amount refunded was paid, the applicants called upon the resposdents to pay interest at the rate of 12 per cent per annum for retaining the amount without any authority of law for a period of more than 2 years. In reply, the respondents disowned their liability to pay interest by stating :-

"it is to inform you that there is no provision in the Central Excise and Salt Act, 1944 to give interest on the refunded amount. "

( 7 ) IN this application, the submission of the learned counsel for the applicant is that if the excise authorities have collected any amount as tax without the authority of law, it is just and proper that they should re-pay the same