2014 (6) TMI 653 - AT - Central Excise

Non-payment of interest on alleged delayed payment of rebate claim - Rebate claim sanctioned but appropriated towards the appellant s arrear liability - Held that - Rebate claim of the appellant was filed on 29/04/2010 which was found admissible and sanctioned on 28/07/2010. However, the same was adjusted against some arrears pending against the appellant. The appropriation made by the Revenue was protested by the appellants that such adjustment without putting them to notice was not permissible. Separate appeals filed against the cases of arrears, against which adjustment was made and CESTAT vide order dt 4/10/2010 remanded those case back to the Commissioner (A) to decide the appeals without insisting for a pre-deposit. In the light of above factual matrix, adjustment of arrears from the rebate claim were not justified when separate appeals/stay applications were pending before the appropriate appellate authorities. Full rebate payment was due to the appellant after three months from the date (29/4/2010) of filing the rebate claim but was paid only on 13/5/2011 by the Adjudicating Authority. Interest from 29/7/2010 to 13/5/2011 is payable to the appellant as the rebate claim in fact was sanctioned on 28/7/2010 but adjusted against some arrears which were separately under litigations. - Decided in favour of assessee.

Summary

Issues involved: Non-payment of interest on alleged delayed payment of rebate claim.

Analysis:
1. The appellant filed a rebate claim under Rule 18 of the Central Excise Rules, 2002, which was sanctioned but appropriated towards the appellant's arrear liability despite pending appeals and stay applications with the CESTAT against previous orders.
2. The appellant requested the rebate amount to be paid back along with interest as per Section 11BB of the Central Excise Act, 1944, after the CESTAT disposed of their appeal by remand.
3. The original authority granted partial rebate but did not provide interest on the delayed payment, leading to the appellant's appeal for interest from the date of filing the rebate claim.
4. The appellant argued for interest based on various case laws supporting their claim, emphasizing the requirement of payment after three months from the date of filing the refund claim.
5. The Revenue defended the orders passed, but the Tribunal observed that the adjustment of arrears from the rebate claim without notice was not justified, especially when separate appeals were pending.
6. The Tribunal found that full rebate payment was due to the appellant after three months from the filing date, and interest was payable for the period until the actual payment date, as supported by the case laws cited by the appellant.
7. Consequently, the Tribunal allowed the appeal filed by the appellant, providing them with the relief sought and emphasizing the payment of interest on the delayed rebate claim amount.

This detailed analysis of the judgment provides insights into the legal intricacies involved in the non-payment of interest on a delayed rebate claim, highlighting the importance of procedural fairness and adherence to statutory provisions in such matters.