2017 (1) TMI 698 - AT - Central Excise

Interest - the rebate claim of ₹ 28,68,666/- though sanctioned to the appellant on 08-10-2010 / 25-10-2010, but instead of paying that amount, it was adjusted against an Order dated 24/03/2010 against Service Tax dues - Held that - the issue is squarely covered by the decision of this Tribunal in the case of Indu Nissan Oxo Chem Industry Ltd. 2016 (11) TMI 1222 - CESTAT AHMEDABAD - appellant is entitled to interest from the date of adjustment of the rebate claim - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal regarding inadmissible credit and penalty, refund claim with interest, rejection of interest claim, eligibility for interest under Section 11 BB Central Excise Act 1944, reference to previous Tribunal judgment, adjustment of rebate claim against Service Tax dues.

Analysis:
The appeal was filed against Order-in-Appeal No. 18/2013(Ahd-I) CE/AK/Commr(A)/Ahd, related to the appellant allegedly availing inadmissible credit of ?28,66,666, leading to a Show Cause notice for recovery and penalty imposition. The matter was taken to the Tribunal, which allowed the appeal, prompting the appellant to file a refund claim of ?31,74,019, including interest of ?3,05,353. The refund claim was based on the rebate claim of ?28,66,666, which was adjusted by the department against a confirmed demand, resulting in the appellant seeking interest from the date of adjustment. The department allowed the refund claim but rejected the interest claim, leading to the present appeal.

The appellant argued that due to the erroneous adjustment of the rebate claim, they were entitled to interest under Section 11 BB of the Central Excise Act 1944 from the date of adjustment till the Tribunal's order. The appellant referenced a previous Tribunal judgment in the case of M/s Indu Nissan Oxo Chem Industry Ltd. to support their claim. On the other hand, the Authorized Representative for the Revenue supported the decision of the Learned Commissioner (Appeals) in rejecting the interest claim.

After hearing both sides and examining the records, the Tribunal found that the rebate claim, though sanctioned earlier, was adjusted against Service Tax dues instead of being paid to the appellant. The Tribunal noted that the issue was similar to a previous case and ruled in favor of the appellant, stating that they were entitled to interest from the date of adjustment of the rebate claim. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief as per law. The operative part of the order was pronounced in open court, granting relief to the appellant.