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2015 (11) TMI 1159 - AT - Central ExciseDenial of interest claim - Interest on delayed refund - Scope of Section 11BB - Held that - Appellant are entitled to the claim of interest on delayed refund of CENVAT Credit on the four applications filed between 25.07.1994 and 28.04.1995. From the table mentioned as above it seems that the interest amount against the delayed refund claims were calculated taking the date of filing of such claims as the relevant date. However, for pending refund claims as on 26.05.1995, the date of enactment of Sec.11BB, the payment of interest shall be computed in accordance with proviso to Sec. 11BB i.e from 26.08.1995 and not from the date of application of refund in view of the judgment of Hon ble Rajastan High Court in J.K.Cement Works Case(2004 (2) TMI 78 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR). Thus, the case is remanded to adjudicating authority only for the limited purpose of verification/computation of interest amount claimed/to be paid, as the case may be, taking the relevant date as 26.08.1995. - Appeal disposed of.
Issues Involved:
1. Eligibility of interest on delayed refund under Section 11BB of the Central Excise Act, 1944. 2. Applicability of Section 11BB to MODVAT credit refunds under Rule 57F of the erstwhile Central Excise Rules, 1944. 3. Applicability of Section 11BB to refund claims filed prior to the incorporation of the said provision. 4. Relevant date for computation of interest under Section 11BB. Detailed Analysis: 1. Eligibility of Interest on Delayed Refund under Section 11BB: The appellant claimed interest on delayed refunds under Section 11BB of the Central Excise Act, 1944, amounting to Rs. 37,28,253/-. The Assistant Commissioner of Central Excise, Dhanbad, rejected this claim, and the Commissioner (Appeals), Ranchi, upheld the rejection. The appellant argued that the principle of law on the issue of interest on delayed refunds had been settled and that they were entitled to interest. 2. Applicability of Section 11BB to MODVAT Credit Refunds: The appellant contended that Section 11BB applies to MODVAT credit refunds under Rule 57F of the erstwhile Central Excise Rules, 1944. The Tribunal referred to the Gujarat High Court's judgment in Commissioner of Central Excise vs. Reliance Industries Ltd., which was upheld by the Supreme Court, and similar judgments from the Madras and Uttarakhand High Courts. These judgments affirmed that Section 11BB applies to MODVAT credit refunds. 3. Applicability of Section 11BB to Refund Claims Filed Prior to Incorporation: The appellant argued that Section 11BB should apply to refund claims filed before its incorporation on 26.05.1995. The Rajasthan High Court in J.K. Cement Works vs. Asstt. Commissioner of Central Excise & Customs, confirmed by the Supreme Court in Ranbaxy Laboratories Ltd. vs. UOI, held that Section 11BB applies to refunds pending as of 26.05.1995. The court stated that if the refund was not paid within three months from the date of application or from 26.05.1995 for pending claims, interest is payable from 26.08.1995. 4. Relevant Date for Computation of Interest: The appellant contended that the interest should be computed from the date of filing the refund claims. The Tribunal, referencing the Rajasthan High Court and Supreme Court judgments, held that the relevant date for computing interest under Section 11BB is three months from the date of application or, for pending claims as of 26.05.1995, from 26.08.1995. The Tribunal rejected the argument that the date of the final order of the Tribunal is relevant for computing interest. Conclusion: The Tribunal concluded that the appellant is entitled to interest on delayed refunds of CENVAT Credit for claims filed between 25.07.1994 and 28.04.1995. The case was remanded to the adjudicating authority for verification and computation of the interest amount, taking 26.08.1995 as the relevant date for pending claims as of 26.05.1995. The entire exercise of verification and payment of interest is to be completed within three months from the date of communication of the order. The appeal was disposed of accordingly. (Pronounced in the open court on 20.11.2015.)
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