2016 (7) TMI 1319 - AT - Central Excise

Entitlement to interest - delayed sanction of the rebate claim - Section 11BB of the Central Excise Act, 1944 - Held that - Since the rebate application has not been considered for payment within 3 months from the date of its filing, interest liability is automatic in terms of Section 11BB of the Act and the applicant is entitled for the statutory interest for the period between expiry of 3 months of the date of filing of the rebate application till its sanction by the Department - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Claim of interest under Section 11BB of the Central Excise Act, 1944 for delayed sanction of rebate claim.

Analysis:

Issue 1: Claim of interest for delayed sanction of rebate claim
The case revolved around the claim of interest under Section 11BB of the Central Excise Act, 1944 due to the delayed sanction of the rebate claim. It was established that the rebate application submitted was not processed within the stipulated 3-month period as prescribed by Section 11B of the Act. As a result, the appellant was deemed entitled to statutory interest for the period extending from the expiry of the 3-month timeframe from filing the rebate application until its final sanction by the Department. The Tribunal noted that since the Department did not contest the delay in sanctioning the rebate claim, the appellant was rightfully entitled to the interest for the delayed sanction. The Tribunal supported this decision by referencing relevant cases such as M/s. Madura Coats Pvt. Ltd. v. CCE, Madurai and CCE, Chennai-IV v. Hindustan Petroleum Corpn. Ltd., which further strengthened the appellant's case for claiming interest due to the delayed sanction of the rebate claim.

Outcome:
Consequently, the impugned order was overturned, and the appeal was ruled in favor of the appellant, granting them the consequential benefit of interest for the delayed sanction of the rebate application. The Tribunal's decision highlighted the importance of adhering to the statutory provisions regarding the timely processing and sanctioning of rebate claims under the Central Excise Act, ensuring that rightful claimants receive the appropriate interest for any delays in the administrative procedures.