2004 (12) TMI 641 - AT - Central Excise

Summary

Issues:
1. Entitlement to interest on refund claim under Section 11BB of the Central Excise Act.

Analysis:
The appellants filed a refund claim of Rs. 1,98,528/- after an Order-in-Appeal was passed in their favor. The refund claim was sanctioned, but no finding was given on their request for interest. The Asstt. Commissioner informed them that under Section 11BB of the Central Excise Act, there is no provision for interest for the period from duty payment to claim sanction. The appellants then filed an application for interest refund, which was rejected by the Commissioner (Appeals) as the refund was allowed within three months of filing, considering it a consequential relief arising from the allowed appeal.

The appellants argued that they deposited duty immediately when an additional demand was raised, which was later decided in their favor by the Supreme Court. They claimed entitlement to interest as they were deprived of the deposited amount, affecting their finances. The Revenue contended that Section 11BB clearly states that if a refund order is made by the Commissioner (Appeals) against an Asstt. Commissioner's order, it is deemed to be under Section 11B. As the refund arose from the Order-in-Appeal and was sanctioned within three months of filing, the appellants were not entitled to interest.

After considering the arguments, the judge found that as per the Explanation to Section 11BB, the appellants were not entitled to interest as the refund was sanctioned within three months of filing, following the Order-in-Appeal. Consequently, the appeal for interest refund was rejected. The operative part of the order was pronounced on 24-12-2004.