2016 (12) TMI 1650 - AT - Central Excise

Interest on delayed refund - abatement during closure of the stenter - case of appellant is that even though they filed refund claim in January, 2000, but it was allowed to them in the year 2011. Therefore, they are eligible to interest which was not considered in the impugned order - Held that - as the abatement claim was considered by the adjudicating authority pursuant to the Tribunal s order and it was allowed by crediting their PLA account. Since they could not utilize the said PLA credit, the amount in cash was sanctioned within three months of their refund application - appeal dismissed - decided against appellant.

Summary

Issues:
Refund claim under compounded levy scheme; Rejection of refund claim; Abatement claim under relevant Rule; Interest under Section 11BB of Central Excise Act, 1944; Conversion of refund claim into abatement claim; Crediting amount to PLA account; Cash refund due to factory closure; Discrepancy in impugned order.

Analysis:
The appeal before the Appellate Tribunal CESTAT Ahmedabad pertained to a refund claim filed by the appellants who were engaged in the manufacture of MMF Fabrics under a compounded levy scheme. The appellants had filed a refund claim amounting to ?4,24,500 due to the closure of their stenter during a specific period. The initial refund claim was rejected, leading to the matter being brought before the Tribunal. The Tribunal directed the adjudicating authority to consider the refund claim as an abatement claim under the relevant Rule and to decide the claim afresh. Subsequently, the abatement was allowed by crediting the amount to the appellants' PLA account. However, as the factory remained closed, a cash refund was sanctioned later. The appellants then filed an appeal seeking interest under Section 11BB of the Central Excise Act, 1944, from the date of filing the refund claim. The Commissioner (Appeals) rejected this claim, prompting the present appeal.

The appellant argued that although the refund claim was filed in January 2000, it was allowed only in 2011, making them eligible for interest not considered in the impugned order. On the other hand, the Revenue's representative contended that the appellants initially filed a refund claim under Section 11B of the Central Excise Act, 1944, instead of claiming abatement for the stenter closure period. The Tribunal converted this claim into an abatement claim and directed adjudication accordingly. The abatement was credited to the appellants' PLA account, and the cash refund was provided later due to the factory closure. The Revenue argued that no interest under Section 11BB was payable in this scenario.

The Tribunal found merit in the Revenue's argument, noting that the abatement claim was duly considered by the adjudicating authority as per the Tribunal's direction. The amount was credited to the PLA account, and the cash refund was processed within three months of the refund application. Consequently, the Tribunal concluded that there was no discrepancy in the impugned order and dismissed the appeal for lacking merit.