2012 (5) TMI 272 - AT - Central Excise

Interest on Delayed refund (rebate claim) under central excise - Section 11B - held hat - in regard to Central Excise Law, there is specific provision for grant of interest under Section 11BB and there is no reason why the same should not be followed. The matter has also been dealt with at length in the case of Ranbaxy Laboratories Ltd. (2011 (10) TMI 16 (SC)) wherein the Hon ble Supreme Court has categorically ruled that interest has to be paid beyond the delay of 3 months from the date of filing the claim. - Decided in favor of assessee.

Summary

Issues:
1. Jurisdiction of the Tribunal to decide on interest claims related to rebate.
2. Entertaining appeals involving individual amounts less than Rs.50,000.
3. Granting interest under Section 11BB for delayed refund claims.

Analysis:
1. The primary issue before the Tribunal was the jurisdiction to decide on interest claims related to rebate. The appellant argued that the Tribunal has jurisdiction as the rebate claims had been settled, and they were seeking interest under Section 11BB for delayed refund sanction. The Tribunal found that while the Tribunal's jurisdiction is ousted for appeals on rebate of duty of excise, there is no specific bar for interest on rebate claims treated as refund claims under Section 11B. Thus, the preliminary objection raised by the respondent was overruled.

2. The second objection raised was regarding the individual amounts in each of the 18 appeals being less than Rs.50,000. The Tribunal has the discretion not to entertain appeals below this threshold. However, considering the recurring nature of the issue and the different periods involved in these appeals, all 18 appeals were admitted for hearing.

3. The main contention revolved around granting interest under Section 11BB for delayed payment of refund claims. The appellants claimed interest due to delays beyond the 3-month period from the date of filing the claims. The department denied interest citing previous court decisions and lack of specific orders from higher courts. The Tribunal, after considering legal provisions and relevant court decisions, ruled in favor of the appellants. It emphasized that Section 11BB allows interest for delays beyond the specified period, irrespective of the reasons for the delay. The Tribunal also highlighted a Supreme Court ruling emphasizing the unconditional nature of interest under Section 11BB, regardless of past legal proceedings. Consequently, the impugned orders denying interest were set aside, and all 18 appeals were allowed with consequential relief to the appellants.