2004 (2) TMI 82 - HC - Central Excise

Summary

Issues:
Challenge to Order rejecting revision application for interest on rebate claims under Section 11BB of the Excise Act, 1944.

Detailed Analysis:
1. The petitioners exported goods and filed rebate claims, which were initially allowed by the Deputy Commissioner by way of credit in the RG 23A register. The Commissioner (Appeals) later allowed the claims for rebate in cash, leading to the petitioners seeking interest on the delayed payment of rebate.

2. The petitioners argued that the Deputy Commissioner erred in not directing payment by cheque as per the proviso to sub-section (2) of Section 118, and the Commissioner (Appeals) rightly directed payment by cheque due to sufficient credit in the register. The petitioners relied on Section 11BB and a previous order of the Government of India in a similar case.

3. The respondent authorities contended that the petitioners were not entitled to interest before the Commissioner (Appeals) allowed the rebate in cash. They relied on the explanation to sub-section (2) of Section 11B and the affidavit in reply in support of their position.

4. The Court found that the petitioners were entitled to interest as the rebate claims were eventually paid by cheques, and the Appellate Commissioner confirmed the entitlement to rebate in cash. The dispute was regarding the period for which interest was due under Section 11BB.

5. The Court held that the petitioners were justified in claiming interest from the date of making rebate applications, as the Appellate Commissioner's order merely converted the rebate into cash payment. The Court referenced the clear language of sub-section (2) of Section 11BB to support the petitioners' entitlement to interest.

6. Referring to a previous order of the Central Government in a similar case, the Court further supported the petitioners' claim for interest on delayed rebate amounts. The Court allowed the petition, quashed the impugned order, and directed the respondents to pay interest on the delayed rebate amounts within a specified timeframe.

7. The Court emphasized that the respondents must comply with the directions within the stipulated time, allowing the petitioners to claim additional interest if the directions were not followed. The rule was made absolute with no order as to costs.