2018 (7) TMI 992 - AT - Central Excise

Refund claim - abatement of duty due to non production of notified goods - Compound Levy Scheme - the Appellant on 11.8.2016 filed application before the department for refund of the amount of 17 days (i.e. from 10.11.2011 to 26.11.2011) with interest - Held that - There is no change in the 2008 Rules and 2010 Rules so far as the issue in the present matter is concerned. In this matter there is delay in refund of duty from 21.3.2012 to 19.10.2016 and there is no dispute that the appellant had claimed interest on delay refunds after three months from 21.12.2011 i.e. from 21.3.2012 under Section 11 BB of the Act and the same has been recorded in the adjudicating order also and the same has only been denied on the ground that this Tribunal has not directed for payment of interest on delay refund and also that there is no provision for grant of interest under Rule 10 of 2010 Rules. Merely because the interest on refund is not directed doesn t mean that it has been refused or rejected. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection for interest under Rule 10 of 2010 Rules.

Analysis:
The appellant, under the Compound Levy Scheme for tobacco, filed a refund claim due to non-production of goods. The claim was initially rejected but allowed on appeal by the Tribunal. The appellant then sought a refund with interest for the specified period. The Adjudicating Authority granted the duty abatement but denied interest, a decision upheld by the Appellate Authority. The appellant argued that interest should be granted under Section 11BB of the Central Excise Act, citing Rule 19 of the 2010 Rules. The appellant referred to the Supreme Court's ruling on delayed refunds in the Ranbaxy case, emphasizing the applicability of interest provisions. Additionally, the appellant relied on a Tribunal decision involving similar circumstances to support the claim for interest post three months from the refund claim date.

The Tribunal analyzed the provisions of Section 11BB of the Act and the relevant Rules. It noted the absence of changes between the 2008 and 2010 Rules concerning the issue at hand. The Tribunal emphasized that the delay in refund from 2012 to 2016 warranted interest post three months from the initial refund claim date. The Tribunal highlighted that the denial of interest was based on the absence of a specific directive in the Tribunal's previous order and the lack of a provision for interest under Rule 10 of the 2010 Rules. However, the Tribunal clarified that the absence of a specific direction did not equate to a rejection of interest. Relying on the Supreme Court's decision in the Ranbaxy case and a Tribunal ruling in a similar matter, the Tribunal allowed the appeal, acknowledging the appellant's entitlement to interest on delayed refunds.

In conclusion, the Tribunal allowed the appeal, emphasizing the applicability of interest provisions under Section 11BB of the Act and relevant legal precedents. The decision highlighted the importance of granting interest on delayed refunds post three months from the refund claim date, despite the absence of a specific directive in the previous Tribunal order or a provision for interest under the 2010 Rules.