2004 (2) TMI 116 - AT - Central Excise

Summary

Issues: Eligibility for interest on delayed refund claim under Section 11BB of the Central Excise Act.

Analysis:
The appeal filed by M/s. British Health Products raised the issue of their eligibility to receive interest on a delayed refund claim under Section 11BB of the Central Excise Act. The Appellants, manufacturers of health products and medicines, had a dispute regarding the valuation of their goods and the benefit of Notification No. 175/86. The Tribunal had previously allowed their appeal, which was upheld by the Supreme Court. Subsequently, the Appellants filed a refund claim under Section 11B of the Act, which was sanctioned by the Assistant Commissioner without the interest claimed for the delayed payment. The Commissioner (Appeals) rejected their appeal, stating that the dispute had only concluded after the Supreme Court's decision on 7-4-2000. The Appellants argued that Section 11BB clearly provides for interest if the duty is not refunded within three months of the application, and since they filed the claim on 20-7-99 but a show cause notice was issued on 5-6-2000, the delay was not attributable to them, making them eligible for interest.

In response, the Departmental Representative reiterated the findings of the impugned order, arguing against the Appellants' claim for interest on the delayed refund. However, the Tribunal considered both sides' submissions and found that the Appellants had filed the refund claim promptly after the Tribunal's decision in their favor, without any stay granted by the Supreme Court on the Tribunal's order. The Tribunal noted that the Revenue took over 10 months to issue a show cause notice proposing the rejection of the refund claim, which delayed the process. The Tribunal emphasized that the requirement for meeting the points raised in the show cause notice would only arise after its issuance, and accepting the Revenue's contention would render the provisions of Section 11BB redundant. Therefore, the Tribunal held that the Appellants were indeed eligible for interest under Section 11A and 11BB of the Central Excise Act from the expiry of three months from the date of their refund application until the actual refund of duty.