2011 (5) TMI 168 - AT - Central Excise

Claim of interest - Abatement of duty - Sanctioned after inordinate delay - Once the assessees were informed on 13.01.2010 that the Dy. Commissioner was not authorized to sanction/consider claims filed under Rule 96ZQ of the erstwhile Central Excise Rules, 1944, they adopted the correct course of action by filing claim before the proper authority viz., the Commissioner - The Commissioner should have disposed of their claim for interest on merits, instead of driving the assessees to file an appeal before the Commissioner (Appeals) against the communication dated 13.01.2010 - Hence, set aside the impugned order and remand the matter to the Commissioner for fresh decision on merits.

Summary

Issues:
Claim for abatement of duty during closure period, rejection of interest claim by Dy. Commissioner, proper authority for interest claim, dismissal of appeal by Commissioner (Appeals), authority to consider claims under Rule 96ZQ.

Analysis:
The case involves assessees, an independent textile processor, who filed a claim for abatement of duty during a closure period, which was approved after a delay. Subsequently, they sought interest payment, but the Dy. Commissioner rejected their claim citing lack of authorization to consider claims under Rule 96ZQ. The assessees then applied to the Commissioner of Central Excise, Salem, for interest payment. However, they were directed to appeal the initial rejection by the Dy. Commissioner. The Commissioner (Appeals) dismissed the appeal, stating the Dy. Commissioner's letter was not a decision under the Central Excise Act, leading to the appeal before the Tribunal.

Upon hearing both parties, the Tribunal noted that the assessees took the correct action by applying to the Commissioner after being informed of the Dy. Commissioner's lack of authority. The Tribunal criticized the Commissioner for not deciding on the interest claim's merits and forcing the assessees to appeal. As the interest claim remained unresolved, the Tribunal set aside the Commissioner (Appeals) order and remanded the case to the Commissioner for a fresh decision after hearing the assessees.

Therefore, the Tribunal allowed the appeal through remand, emphasizing the need for a proper consideration of the interest claim on its merits by the Commissioner. The case highlights the importance of the correct authority handling claims under specific rules and the necessity for thorough examination of claims before resorting to appeals.