2020 (10) TMI 56 - AT - Central Excise

Interest on Delayed Refund of CENVAT Credit - non payment of interest to the appellant after three months from the date of filing of original refund claim i.e. 19.09.2016 till its realisation - HELD THAT - In this case, it is in fact on record that the adjudicating authority has sanctioned the refund claim under Section 11B of Central Excise Act, 1944 and the said part of the order has attained finality as the revenue had not challenged the said order before any appellate authority. In that circumstances, in the impugned order mere mentioning that the adjudicating authority has erroneously sanctioned refund claim under Section 11B of the Act shall not make the order of the adjudicating authority on better footing. The fact is on record that the adjudicating authority sanctioned refund claim under Section 11B of the act, therefore, provisions 11BB of Central Excise Act, 1944 are attracted to the facts of this case for entertaining the claim of interest - the appellant is entitled to claim interest on delayed refund. From which date the appellant is entitled to claim interest on delayed refund? - HELD THAT - It is a settled law of by the Hon ble Apex Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT that assessee is entitled to claim interest on delayed refund after three months from the date of filing of refund claim before the authorities till its realization. The appellant is entitled to claim interest after three months from the date of filing of refund on 19.09.2016 till its realization - Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Appeal against rejection of interest on delayed refund under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:
The appellant filed a refund claim under Rule 5 of Cenvat Credit Rules, 2004, which was initially allowed by the Tribunal. Subsequently, the appellant requested interest on the refunded amount, which was not granted by the department. The appellant challenged the non-payment of interest before the Ld. Commissioner (Appeal), who dismissed the claim citing the erroneous sanctioning of the refund claim under Section 11B of the Central Excise Act, 1944 instead of Rule 5 of Cenvat Credit Rules, 2004. The appellant contended that interest should be paid as per the decision in the case of C.C.E vs. Reliance Industries Ltd. and Ranbaxy Laboratories Ltd. vs. Union of India. The Ld. AR defended the decision by stating that the appellant did not specify the provision for claiming interest. The Tribunal noted that the adjudicating authority had indeed sanctioned the refund claim under Section 11B of the Central Excise Act, 1944, and as the Revenue did not challenge this order, the provisions of Section 11BB were applicable. Consequently, the Tribunal held that the appellant was entitled to claim interest on the delayed refund.

The Tribunal further clarified that the appellant could claim interest after three months from the date of filing the refund claim until its realization, in accordance with the decision in Ranbaxy Laboratories Ltd. vs. Union of India. Therefore, the Tribunal allowed the appeal and disposed of the case by granting the appellant the right to claim interest on the delayed refund from the specified date until realization.