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2009 (5) TMI 482 - AT - Central ExciseCenvat Credit- The respondents were manufacturing biscuits on job work basis for M/s. Ampro Products Ltd. During the period in question, the valuation of the goods was done on provisional assessment basis. The Consequent to such a finalization, the refund claims were filed by the respondents within six months of the assessment. In the first round of litigation, the refund claims were rejected on the ground that they have not crossed the hurdle of unjust enrichment. On an appeal, Tribunal vide its Final Order No. 984-985/05 dated 21-6-05, held, that the assessments were provisional and hence refund which arises as a result of finalization cannot be considered as time-barred and clause of unjust enrichment will not be attracted, and directed the lower authorities to refund the excess duty paid by the respondents, Consequent to the direction of the Hon ble Tribunal, refund claim was sanctioned and was given to the respondents. Respondents were aggrieved by such an order for non-granting of interest on such refund claim, hence filed an appeal. Learned Commissioner (Appeals) after hearing the respondents and going through the case records, came to the conclusion that the respondents have to be paid interest as per the judicial pronouncements made by various Benches. Hence, Revenue is in appeal against such an Order. Held that- impugned order is upheld. Revenue appeal is rejected.
Issues:
- Calculation of interest on refund claims post finalization of provisional assessments. Analysis: 1. Background: The case involved an appeal against OIA No. 6/2006 (H-III) C.E. dated 14-2-2006. The respondents were manufacturing biscuits on job work basis for another company, and the valuation of goods was done on a provisional assessment basis. The finalization of the provisional assessment led to refund claims by the respondents, which were initially rejected on the grounds of unjust enrichment. 2. First Round of Litigation: The Tribunal, in its Final Order No. 984-985/05 dated 21-6-05, held that since the assessments were provisional, the refund resulting from finalization cannot be considered time-barred, and unjust enrichment clause does not apply. The Tribunal directed the lower authorities to refund the excess duty paid by the respondents, leading to the sanctioning of the refund claim. However, the respondents were not granted interest on the refund, leading to further appeal. 3. Arguments - JCDR: The JCDR argued that interest for delayed payment should be calculated from the date of the Tribunal's final decision on 21-6-05. She contended that a fresh refund claim should be filed after the Tribunal's final order, and interest, if applicable, should be paid after three months from the filing of the refund claim. Referring to Section 11B(3) of the Central Excise Act, she emphasized the need for a proper refund claim as per judicial precedents. 4. Arguments - Counsel: The counsel for the respondents argued that interest should be calculated from the date of filing the refund claim, citing precedents like the Jayanta Glass Ltd. and Rama Vision Ltd. cases. He highlighted that various judicial pronouncements support interest calculation from the refund claim filing date. 5. Tribunal's Decision: After considering both sides' arguments and reviewing the records, the Tribunal found that the respondents had filed refund claims within the required timeframe after finalization of provisional assessments. The Tribunal noted that the lower authorities' finalizations were correct, and the refund claims were timely. Therefore, interest was deemed payable after three months from the date of filing the refund claim, as per the Larger Bench decision in the Jayanta Glass Ltd. and Rama Vision Ltd. cases. 6. Conclusion: The Tribunal upheld the order of the learned Commissioner (Appeals), stating it was correct and legal. Consequently, the Revenue's appeal was rejected for lacking merit, and the impugned order was upheld. The decision was pronounced in open court at the conclusion of the hearing.
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