2016 (6) TMI 605 - AT - Central Excise

Appropriation of interest amount against the rebate claim sanctioned to appellant - Held that - This Tribunal vide Final Order allowed the refund of 43, 96, 488/- holding that the credit availed on duty paid on ethyl alcohol is admissible. On such score it is find that the appropriation of the amount of 18, 18, 986/- being the interest upon 43, 96, 488/- against the rebate claim sanctioned to the appellant is not legal or proper. The appellant is eligible for the sanctioned rebate claim without reduction of interest of 18, 18, 986/-

Summary

Issues:
1. Adjustment of interest against rebate claim sanctioned to the appellant.

Analysis:
The appellant availed Cenvat credit on duty paid on ethyl alcohol, but later was directed to reverse the credit of a specific amount by the Superintendant of central excise. Subsequently, the appellant filed a refund claim for the reversed amount. A show cause notice was issued proposing to reject the refund claim on the grounds that ethyl alcohol is not an excisable product, and hence, no duty is payable on it. The Tribunal, in a previous order, allowed the refund of the disputed amount, stating that the credit availed on duty paid on ethyl alcohol is admissible.

The appellant had also filed eleven rebate claims, out of which a specific amount was appropriated by the original authority towards interest related to the irregularly availed credit that was under dispute. The appellant appealed against this appropriation of interest, but the Commissioner (Appeals) upheld it. The only issue before the Tribunal was the legality and propriety of the appropriation of interest against the rebate claim sanctioned to the appellant.

The Tribunal, in its Final Order, held that the appellant is entitled to the sanctioned rebate claim without any reduction for interest. It concluded that the appropriation of interest against the rebate claim was not legal or proper, especially considering the previous decision allowing the refund of the disputed credit amount. The appeal was allowed, and consequential reliefs were granted to the appellant. No other arguments were raised during the proceedings.