2009 (4) TMI 642 - AT - Central Excise

Summary

Issues:
1. Refund of interest amount paid twice under CENVAT scheme.
2. Validity of refund claim under Section 11B of the Central Excise Act.
3. Entitlement to cash refund after ceasing to operate under CENVAT scheme.

Analysis:

Issue 1: The appellants debited the applicable credit of duty and interest when transferring machinery, later paying the interest amount of Rs. 13,036 under a TR6 challan. They sought a refund of the interest amount, claiming it was paid twice. The original authority allowed the refund, directing it to be credited to their RG 23A account. However, the Commissioner (Appeals) held that interest payment could not be made through the RG 23A account, and since the appellants were out of the CENVAT scheme from 1-3-2005, the interest amount debited from the CENVAT account would have lapsed. The Commissioner also stated that there was no provision in the statute to allow a refund of interest paid.

Issue 2: The appellants contended that they were eligible for the refund as they had paid interest twice by mistake and should receive it in cash since they had ceased operating under the CENVAT scheme. However, the Tribunal found that the appellants did not present a valid challenge to the Commissioner's findings that there were no statutory provisions for a refund of interest. The Tribunal also noted that had the interest amount not been debited from the RG 23A account, it would have lapsed upon ceasing to operate under the CENVAT scheme. The Tribunal upheld the Commissioner's decision, stating that the appellants failed to substantiate their entitlement to a cash refund of the interest amount.

Issue 3: The Tribunal, after considering the grounds raised and submissions from both sides, concluded that the appellants did not provide a valid challenge to the Commissioner's decision. The appellants' argument that they should receive a cash refund due to ceasing CENVAT operations was not supported by sufficient evidence. Therefore, the Tribunal sustained the Commissioner's decision and rejected the appeal, emphasizing the lack of statutory provisions for refunding interest paid under the circumstances described.

This detailed analysis outlines the key issues raised in the judgment and the Tribunal's reasoning behind upholding the decision regarding the refund claim for the interest amount paid twice under the CENVAT scheme.