2015 (3) TMI 997 - CGOVT - Central Excise

Claim of Interest on delayed sanction of rebate - Held that - The applicant filed appeal before Commissioner(Appeals) on the ground that the said claim was sanctioned without applicable interest to them inspite of their eligibility of interest in terms of Section 11BB of the Central Excise Act, 1944. Commissioner(Appeals) rejected the appeal filed by the applicant. - on delayed payment of refund/rebate claim interest is payable after the expiry of three months of the date of receipt of application for rebate in the Divisional office in terms of Section 11BB of Central Excise Act, 1944. Once, the rebate claim is held admissible, interest becomes payable after expiry of 3 months from the date of receipt of rebate claims in the office of rebate sanctioning authority. Government notes that the lower authorities have not considered the above precedent judgements while passing the impugned orders disallowing interest claim. - matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
1. Eligibility for rebate claim on duty-paid packing material used for export.
2. Compliance with procedural requirements under Notification No. 21/2004 CE (NT).
3. Entitlement to interest on delayed rebate payment under Section 11BB of the Central Excise Act, 1944.

Issue-wise Detailed Analysis:

1. Eligibility for Rebate Claim on Duty-Paid Packing Material Used for Export:
The applicant, a merchant exporter, filed a rebate claim for Rs. 1,43,74,995/- on 10.07.2007, asserting eligibility for rebate on duty-paid PP woven sacks used for packing exported rice. Initially, the Assistant Commissioner of Central Excise rejected the claim due to non-compliance with procedural requirements under Notification No. 21/2004 CE (NT). The applicant's subsequent appeals to the Commissioner (Appeals) and the Government of India were partially successful. The Government of India allowed the rebate claim, leading to the sanctioning of the amount under Section 11B of the Central Excise Act, 1944, read with Rule 18 of the Central Excise Rules, 2002.

2. Compliance with Procedural Requirements under Notification No. 21/2004 CE (NT):
The Assistant Commissioner rejected the initial claim due to the applicant's failure to meet procedural requirements, such as filing the requisite declaration, input-output ratio, and ARE-2 forms. The Commissioner (Appeals) upheld this decision. However, the Government of India, upon revision, sanctioned the rebate claim, indicating that the procedural lapses were either rectified or deemed non-critical to the eligibility of the rebate.

3. Entitlement to Interest on Delayed Rebate Payment under Section 11BB of the Central Excise Act, 1944:
The applicant contended that the rebate was sanctioned without the applicable interest, despite eligibility under Section 11BB of the Central Excise Act, 1944. The Commissioner (Appeals) rejected this claim. The applicant cited several judgments, including the Supreme Court's decision in M/s Ranbaxy Laboratories Ltd. vs. UOI, which clarified that interest is payable on delayed refunds after three months from the date of receipt of the rebate application. The Government of India noted that the lower authorities failed to consider these judgments and remanded the case back for fresh consideration, emphasizing that interest becomes payable after three months from the date of receipt of the rebate claim.

Conclusion:
The Government of India set aside the impugned Order-in-Appeal and remanded the case back to the original authority for reconsideration in light of the Supreme Court's judgment and other relevant case laws. The original authority is instructed to provide a reasoned order and afford a reasonable opportunity of hearing to the parties. The revision application is disposed of accordingly.