2004 (3) TMI 460 - AT - Central Excise

Summary

Issues:
Delay in sanctioning refund of duty claim.

Analysis:
The appeal involved a dispute regarding the delay in sanctioning the refund of duty claim filed by M/s. Kelvinator of India. The Appellants had initially deposited a certain amount of duty under protest, which was later set aside by the Appellate Tribunal. The subsequent refund claim was rejected by the Asst. Commissioner citing unjust enrichment. However, the Commissioner (Appeals) remanded the matter directing the Adjudicating Authority to sanction the refund claim upon submission of appropriate certificates. The Appellants argued that there was no delay on their part in providing the necessary evidence and that the interest claimed by them should be considered. They relied on a precedent stating that interest is payable once duty is ordered to be refunded.

On the other hand, the Respondent contended that the Appellants failed to provide proof that the duty incidence had not been passed on to any other person, leading to the rejection of the claim based on unjust enrichment. The Adjudicating Authority required specific certificates to counter the allegation of unjust enrichment, which were only submitted by the Appellants after a significant delay. The Respondent emphasized the importance of furnishing the required evidence in a timely manner to process the refund claim effectively.

The Tribunal, after considering both parties' submissions, referred to Section 11BB of the Central Excise Act, which mandates the payment of interest if the duty refund is not processed within 3 months of the application receipt. It was noted that the refund claims were not refunded within the specified period, indicating a delay in the process. The Tribunal acknowledged that the Appellants had not initially provided the necessary evidence to establish non-passing of duty incidence. However, it was highlighted that the delay in adjudicating the matter and the subsequent disposal by the Commissioner (Appeals) contributed to the overall delay in sanctioning the refund. The Tribunal held that the Appellants were entitled to interest from the date of refund application receipt, deducting the period taken to submit the required certificates as directed by the Commissioner (Appeals).

In conclusion, the Tribunal ruled in favor of the Appellants, stating that they were eligible for interest on the refund amount due to the delay in processing the refund claim. The appeal was disposed of with the decision to pay interest from the date of receipt of refund applications till the actual refund date, deducting the time taken by the Appellants to provide the necessary certificates as directed.