2010 (10) TMI 1061 - HC - Central Excise

Cash Refund - shifting of unit of assessee, where he was exempt from paying Central Excise - Held that - The unit of the respondent-assessee originally located at Delhi has been shifted to Baddi where it is very much functioning. However, in that area, the assessee was exempt from paying central excise. In these circumstances, no useful purpose would have been served in crediting the amount in the CENVAT account - cash refund to be allowed. Interest on delayed refund - Held that - Interest definitely accrued to the respondent, as the refund was made belatedly under Section 11BB of CEA 1944, which stands attracted - interest allowed. Appeal dismissed - decided against Revenue.

Summary

Issues:
Refund of pre-deposit in cash, interest on belated refund.

Refund of Pre-deposit in Cash:
The respondent had made pre-deposits in two appeals against Orders-in-Original, which became refundable upon succeeding in the appeals. The Adjudicating Authority credited the amounts to the CENVAT account, but the assessee sought a cash refund. The Commissioner of Central Excise (Appeals) accepted the plea, directing the refund in cash. The Tribunal affirmed this decision, emphasizing the discretionary nature of allowing cash refunds under certain circumstances. The Tribunal noted that the assessee's unit had shifted to an area exempt from central excise, making crediting the amount in the CENVAT account futile. No substantial question of law arose in this regard.

Interest on Belated Refund:
The Tribunal found that interest accrued to the respondent due to the belated refund under Section 11BB of the Central Excise Act, 1944. Citing the Supreme Court's judgment in a similar case, the Tribunal granted interest. It was concluded that no question of law arose concerning the interest issue. The appeal was dismissed for lacking merit.

This judgment dealt with the dispute over refunding pre-deposits in cash and the accrual of interest on belated refunds. The courts upheld the decision to refund the amounts in cash, considering the circumstances of the case. Additionally, interest was awarded as per the provisions of the Central Excise Act.