2009 (7) TMI 1064 - AT - Central Excise

Summary

Issues involved: Refund claims under Rule 173-L of Central Excise Rules, 1944; Eligibility for interest on refund amount.

Refund Claims under Rule 173-L:
The appellants filed four refund claims with the Department totaling Rs. 41,98,105 under Rule 173-L of Central Excise Rules, 1944. Show cause notices proposing rejection of these claims were issued and subsequently rejected. The Commissioner (Appeals) set aside the rejection orders, and the refund was requested. A show cause notice proposing rejection was issued again, and the refund was sanctioned but silent on the interest aspect. The issue revolved around the eligibility for refund and interest on the amount.

Eligibility for Interest on Refund Amount:
The Department argued that interest on the refund amount is payable only from the date Cenvat credit was paid until the date the refund claim was given. The respondent contended that interest should be considered from three months after the refund claim filing date. Legal precedents from the Hon'ble Rajasthan High Court and the Larger Bench of the Tribunal were cited to support the argument for interest calculation.

Judgment:
After considering submissions from both sides, it was acknowledged that the applicant was eligible for the refund of Rs. 41,98,105. The liability for interest after three months from the refund claim filing date was settled. Citing legal provisions and precedents, the judgment highlighted the importance of paying interest on delayed refunds. In this case, interest was ordered to be calculated on a portion of the refund amount until a specific date and then on the entire amount until the refund claim sanction date. The appeal was disposed of based on these terms.