2011 (8) TMI 354 - AT - Central Excise

Export of goods - Rebate claim - Provisions of Rule 18 of Central Excise Rules, 2002 - In this case the refund claim was sanctioned and in accordance with which Section 11BB of Central Excise Act, the same should have been paid. Since it has not been paid and appropriation has been wrongly made when it was not to be made, the appellants become eligible for interest as if the amount has not been paid when the original refund claim was submitted. On this ground alone the rebate claim has to be allowed. appellants are eligible for interest for the amount of Rs.9,04,894/- and the relevant date would be the date on which the rebate claim had been filed for deciding the quantum of interest.

Summary

Issues:
1. Appropriation of amount from rebate claim
2. Eligibility for interest on withheld amount

Issue 1: Appropriation of amount from rebate claim
The case involved the appellant, engaged in manufacturing pharmaceutical products, filing two rebate claims for duty paid on exported goods. The Assistant Commissioner sanctioned the claims but reduced the payable amount by Rs.9,04,894, citing a demand due to the Revenue. The Commissioner (Appeals) later allowed the appeal against this decision, stating that the demand did not exist. The appellant sought payment of the withheld amount, which was granted without interest. The appellant contended that interest should be paid from the date of filing the refund claim. The Tribunal emphasized that coercive measures for recovery should not be taken within sixty days of the order, as per the Circular dated 25.05.04. The Tribunal held that the appropriation of the amount was wrong and that the appellants were eligible for interest as per Section 11BB of the Central Excise Act.

Issue 2: Eligibility for interest on withheld amount
The authorized representative argued that interest should be paid from the date of filing the refund claim, relying on precedents like the case of Kirloskar Ferrous Industries Ltd. The Tribunal agreed, stating that interest becomes admissible if a refund is delayed beyond three months. The Tribunal distinguished another case, Birla Copper, where the stay had not been extended, leading to appropriation after 180 days. In the present case, the stay application was pending when the appropriation was made, making the appellants eligible for interest. The Tribunal ruled that the appellants were entitled to interest on the withheld amount from the date of filing the rebate claim.