2007 (2) TMI 138 - CGOVT - Customs

Interest on delayed refund - Appellant claim for interest on delayed refund after allowance of refund claim by Commissioner (A) - Held that interest on delayed refund allowed after three month from the Commissioner (A) order u/s 11BB

Summary

Issues Involved:
1. Rejection of rebate claims.
2. Interest on delayed payment of rebate claims.
3. Submission and adequacy of disclaimer certificates.
4. Applicability of Section 11BB of the Central Excise Act, 1944.

Issue-wise Detailed Analysis:

1. Rejection of Rebate Claims:
The applicant, a merchant exporter, filed two rebate claims under Rule 12(1)(b) of the Central Excise Rules, 1944, for refrigerated vans exported. The claims were rejected by the original authority on the grounds that the applicant had already claimed duty drawback under Tariff Heading No. 87.04, which contravened Rule 12(3) of the Central Excise Rules, 1944, and Rule 12(1)(a) of the Customs & Central Excise Duties Drawback Rules, 1995. The Commissioner (Appeals) set aside the rejection, stating that the rebate claims were for the Central Excise duty element, while the drawback was for the customs duty element.

2. Interest on Delayed Payment of Rebate Claims:
The applicant's request for interest on delayed payment was rejected by the original authority, citing that the requisite disclaimer certificate from the manufacturer was not submitted in time. The Commissioner (Appeals) upheld this decision, stating that the refund was sanctioned within three months of the submission of the required documents, hence there was no delay.

3. Submission and Adequacy of Disclaimer Certificates:
The applicant argued that the disclaimer certificates were submitted along with the rebate claims, and the requirement for a fresh certificate from Telco Jamshedpur was an unnecessary imposition by the department. The Commissioner (Appeals) noted that the final disclaimer certificate was submitted on 22-4-2003, and the refund was sanctioned on 9-5-2003, within three months of this submission.

4. Applicability of Section 11BB of the Central Excise Act, 1944:
The applicant contended that under Section 11BB, interest was a statutory obligation if the rebate was not disbursed within three months from the application date. The Government agreed, citing judgments from the Tribunal and High Courts which held that interest is payable from the expiry of three months from the date of the refund application until the actual payment date. The Government set aside the impugned Order-in-Appeal and remanded the case back to the original authority to calculate and disburse the interest as per Section 11BB.

Conclusion:
The Revision Application succeeded, and the case was remanded to the original authority for calculating and disbursing interest to the applicants under Section 11BB of the Central Excise Act, 1944. The Government emphasized that the rebate claims should have been refunded within the prescribed time limit, and the applicants were entitled to interest due to the delay.