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2021 (8) TMI 724 - HC - Central ExciseRefund of accumulated credit - Deemed export - supply under ICB - rejection on the ground that there was no Physical Export under Rule 5 of the said Rules for seeking refund - goods cleared under the notification dated 17.03.2012 against ICB at Nil rate of duty - HELD THAT - The substantial question of law as framed has to be answered in favour of the appellant. It is undisputed that for the period from January2014 to December-2014 the present appellant had claimed similar refund of Cenvat credit under Rule 5 of the said Rules on the ground that said credit remained unutilized due to clearances of the final products under ICB - The Tribunal by its judgment dated 17.06.2016 considered the judgment in the case of COMMR. OF CENTRAL EXCISE VERSUS SHILPA COPPER WIRE INDUSTRIES 2010 (2) TMI 711 - GUJARAT HIGH COURT and held that in view of that decision, the clearances made by the appellant herein to ICB had to be considered as exports for being entitled to claim refund of Cenvat credit. The Revenue proceeded to challenge that adjudication by filing the case as decided in PRINCIPAL COMMR. OF CUS., C.E. S.T., NAGPUR VERSUS FABRIMAX ENGG. PVT. LTD. 2017 (2) TMI 1316 - BOMBAY HIGH COURT where they upheld the order of the Tribunal. It is thus clear that for the earlier period from January-2014 to December-2014 the claim for refund made by the appellant under Rule 5 of the said Rules was upheld by the Tribunal as well as by this Court. Notably this adjudication pertains to the appellant itself. Despite the fact that the aforesaid orders were placed before the Tribunal in the present proceedings it has not given due weightage to the same but has sought to distinguish the same on untenable grounds. The entitlement to refund under Rule 5 of the Rules stands established in view of the legal position referred to above as the claim as made has been disallowed in a manner contrary to law. In that view of the matter the substantial question of law as framed is answered by holding that the appellant is entitled for refund under Rule 5 of the said Rules read with notification dated 17.03.2012 and Section 11B of the said Act. Time limitation for calculation of interest on delayed refund - HELD THAT - This issue stands concluded by the judgment of the Hon ble Supreme Court in RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT ). This very question as regards commencement of the period for the purposes of paying interest on delayed refund under Section 11BB of the said Act was considered alongwith the aspect as to the date from which the entitlement to interest arises. It has been held in clear terms that the liability of the Revenue to pay interest under Section 11BB of the said Act commences from the date of expiry of three months from the date of receipt of the application for refund under Section 11B(1) of the said Act and not on the expiry of the period from the date on which the order of refund is made. This decision has thereafter been consistently followed and hence it is now a settled position that the entitlement to interest on delayed refund would commence on the expiry of the period of three months from the date of receipt of the application for refund till the date of payment of refund. Appeal allowed.
Issues:
Claim for refund under Rule 5 of Cenvat Credit Rules read with Notification dated 18.06.2012 and Section 11B of the Central Excise Act, 1944. Detailed Analysis: 1. Claim for Refund Under Rule 5 of Cenvat Credit Rules: The appellant filed a refund claim under Rule 5 of the Cenvat Credit Rules for duty paid on inputs used in the manufacture of finished goods cleared under International Competitive Bidding (ICB) during a specific period. The claim was rejected by the Assistant Commissioner, Commissioner (Appeals), and the Customs, Excise and Service Tax Appellate Tribunal. The appellant contended that clearances under ICB should be considered as exports, entitling them to claim a refund. The Tribunal had previously upheld a similar claim by the appellant for a different period. The High Court agreed with the appellant, stating that the appellant was entitled to a refund under Rule 5 of the Rules, as the claim was disallowed contrary to law. 2. Entitlement to Interest on Refund Amount: The appellant raised the issue of entitlement to interest on the refund amount under Section 11BB of the Central Excise Act, 1944. The appellant argued that interest should be paid on the refund amount as per the provisions of the Act. The respondent contested this, stating that since the claim was initially found inadmissible, there was no basis for awarding interest. However, the Court referred to previous judgments and held that the appellant was entitled to interest on the refund amount. The Court clarified that interest under Section 11BB commences from the expiry of three months from the date of the refund application until the payment of the refund. The Court directed the concerned authority to calculate and pay the interest amount to the appellant within eight weeks. 3. Final Order: The High Court set aside the order of the Customs, Excise and Service Tax Appellate Tribunal, allowing the appeal in favor of the appellant. The Court held that the appellant was entitled to a refund under Rule 5 of the Cenvat Credit Rules for the specified amount. Additionally, the Court directed the payment of interest on the refund amount in accordance with Section 11BB of the Act. The Court ordered the calculation and payment of the interest amount by the concerned authority within eight weeks from the date of the judgment. The appeal was allowed, and each party was directed to bear their own costs.
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