2019 (4) TMI 174 - AT - Central Excise

Demand of Interest under Rule 49A of the Central Excise Rules, 1944 - refund claim of interest paid on BED and AED(TTA) - no charging provision - Held that - We do not find how the interest to be collected as there is no charging provision for collection of interest, therefore, we hold that no interest is payable by the appellant. No interest is payable by the appellant under Rule 49A of Central Excise Rules, 1944 in the absence of any charging provision - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against impugned orders for demanding interest under Rule 49A of the Central Excise Rules, 1944.
- Claim of refund of interest paid on duty of processed and unprocessed cotton fabrics cleared for export.
- Claim of refund of interest paid duty on unprocessed cotton fabrics cleared for home consumption.
- Charging provision for interest under Rule 49A of the Central Excise Rules, 1944.

Analysis:
1. The appellant appealed against orders demanding interest under Rule 49A of the Central Excise Rules, 1944. The appellant, engaged in manufacturing cotton yarn and fabrics, filed a refund claim for interest paid on BED and AED(TTA) on captive consumption of cotton yarn. The appellant argued that they were only liable to pay duty on the intermediate product, cotton yarn, cleared for home consumption. The Tribunal previously allowed the refund on processed fabrics but rejected it for unprocessed fabrics cleared for home consumption. The appellant contended that they paid interest on insistence by the revenue without a charging section.

2. The appellant's counsel argued that there is no charging provision for interest under Rule 49A. Referring to a separate proceeding, it was noted that interest under Rule 49A was not payable as no application was made under the rule. The counsel claimed the appellant was entitled to a refund of interest paid on insistence by the revenue. The Revenue reiterated the findings of the impugned order.

3. The Tribunal examined Rule 49A and found no provision for collecting interest without a charging provision. Referring to a previous order in the appellant's case, it was observed that since no application was made under Rule 49A, interest was not chargeable. The Tribunal concluded that no interest was payable by the appellant under Rule 49A due to the absence of a charging provision. Consequently, the impugned order was set aside, and the appeals filed by the appellants were allowed with any consequential relief.

This detailed analysis covers the issues raised in the judgment, including the appeal against demanding interest, the claim of refund on different types of cotton fabrics, and the absence of a charging provision for interest under Rule 49A of the Central Excise Rules, 1944.