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2004 (11) TMI 420 - AT - Central Excise
Issues Involved:
Whether interest is payable by the Department to M/s. Prem Textile Limited for delay in payment of Rebate beyond 3 months. Analysis: The appeal filed by the Revenue questions the payment of interest to M/s. Prem Textile Limited for a delayed rebate. The Respondents exported goods under a rebate claim, initially rejected by the Asst. Commissioner and Commissioner (Appeals), but later allowed by the Government of India in revision. The Dy. Commissioner sanctioned the refund but denied interest, citing an Explanation to Section 11BB of the Central Excise Act. The Commissioner (Appeals) ruled in favor of the Respondents, considering the revisionary authority as falling within the category of an Appellate Court. The Department argued that the revisionary authority is not specified in the Explanation, thus the interest provision of Section 11BB wouldn't apply. The Respondents, represented by an Advocate, filed a Cross Objection, contending that the Explanation cannot restrict the substantive provision of Section 11BB and should only clarify. They referenced a case to support their argument. The Tribunal analyzed the situation, noting that refund under Section 11B includes rebate of duty on exported goods. The rebate claim was filed in 1996 but sanctioned in 2002, exceeding the 3-month refund period as per Section 11BB. Therefore, the Department is liable to pay interest. The Explanation clarifies that orders of refund by specified authorities are deemed as orders under Section 11B. Since the refund order was issued by the Dy. Commissioner, the reliance on the Explanation to deny interest was deemed incorrect. The Tribunal rejected the Revenue's appeal, emphasizing that the purpose of an Explanation is to explain, not restrict, the substantive provision. In conclusion, the Tribunal upheld the decision in favor of M/s. Prem Textile Limited, ruling that the Department is liable to pay interest for the delayed rebate, as per the provisions of Section 11BB of the Central Excise Act.
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