2013 (2) TMI 2 - Commissioner - Central Excise

Rebate Claim Whether rebate sanctioned to the assessee should be credited to their cenvat account Commissioner (A) allowed a consequential relief against the Orders-in-Original Thereafter lower adjudicating authority, sanctioned rebate under Rule 18 of CER 2002 read with Section 11AB and CCR 2004 by way of Cenvat credit Held that - The C.B.E. & C. vide Circular No. 687/3/2003-CX., dated 3-1-2003, in respect of claims pertaining to refund of duty paid through cenvat account, on export, had clarified that there is no discretion with the sanctioning authority to give the refund of duty paid on goods exported through credit account. Therefore duty paid through the actual credit or deemed credit account on the goods exported MUST BE refunded in cash Lower Authority was directed to issue cheque/cash without any further delay In favour of assessee. It was also clarified that interest also should be paid under Section 11BB on this delayed sanction of rebate. In the case of Gujarat Paraffins Pvt. Ltd. v. Joint Secretary, M.F., Govt. of India 2004 (2) TMI 82 - HIGH COURT OF GUJARAT AT AHMEDABAD it was held that Petitioner is entitled for interest Therefore assessee is eligible to claim interest on the delayed payments under Section 11BB of the Central Excise for period commencing from the date of expiry of three months from date of making rebate application, till the day the cheque for the amount is issued to In favour of assessee.

Summary

Issues:
- Whether the rebate sanctioned should be credited to the cenvat account or issued in cash.
- Whether the appellant is entitled to interest on delayed payment of rebate.

Analysis:
- The appellant, a manufacturer of printed cartons, filed an appeal against the rejection of rebate claims by the Deputy Commissioner of Central Excise. The Commissioner (A) set aside the rejection and allowed the rebate claims. The Lower Adjudicating Authority then sanctioned a rebate of Rs. 1,67,70,094 under Rule 18 of CER 2002. The appellant contended that the rebate amount should have been issued in cash and not credited to their cenvat account. They argued that interest should be paid under Section 11BB for the delayed sanction of rebate.
- The Commissioner found that there was no provision empowering the adjudicating authority to credit the rebate in the cenvat account. Referring to a circular by C.B.E. & C., it was clarified that duty paid on exported goods through a credit account must be refunded in cash. The Commissioner held that crediting the rebate amount in the cenvat account did not constitute payment of rebate as intended by the government to encourage exports. Therefore, the order crediting the rebate in the cenvat account was set aside, and the lower authority was directed to issue a cheque/cash to the appellant for the sanctioned rebate amount.
- Regarding the claim for interest on delayed payment of rebate, the Commissioner noted that the impugned order did not discuss this aspect. Citing a judgment from the Hon'ble High Court of Gujarat, it was held that the appellants were entitled to interest under Section 11BB of the Central Excise Act, 1944, for the period from three months after the rebate application until the issuance of the cheque for the amount. The appeal was allowed, affirming the appellant's right to interest on delayed payments of rebate.