2016 (8) TMI 441 - AT - Central Excise

Eligibility for interest - expiry of three months from the date of filing of the refund i.e. from 17.06.2001 to 13.05.2008 and not from 13.09.2001 to 13.05.2008 - Held that - in view of the decision of this Tribunal in the case of Balmer Lawrie & Co. Ltd. vs. Commissioner of C.Ex., Kolkata-VI 2014 (8) TMI 977 - CESTAT KOLKATA , for computing interest, the date of filing of refund claim be considered as the relevant date and not the date when the returned claim has been re-submitted after removal of defects. Therefore, the interest is admissible to the Appellant on expiry of three months from the date of filing of the refund claim. Rate of interest - eligible for interest @ 6% or 12% - Held that - by taking note of the Judgment of Hon ble Supreme Court in the case of Commissioner of Central Excise, Hyderabad vs. ITC. Ltd. 2004 (12) TMI 90 - SUPREME COURT OF INDIA , the rate of interest would be 6% not 12% as claimed by the Appellant. Appropriation of interest - Whether the amount of interest sanctioned to the Appellant can be appropriated towards outstanding arrears of revenue - Held that - in view of the decision of Hon ble Gujarat High Court in the case of Anand Steel Rolling Works Pvt. Ltd. vs. Union of India 2009 (10) TMI 551 - GUJARAT HIGH COURT , the amount of refund calculated cannot be adjusted against the arrears of revenue. - Appeal partly allowed

Summary

Issues:
1. Eligibility of interest period for the Appellant.
2. Determination of the rate of interest for the Appellants.
3. Appropriation of interest sanctioned towards outstanding arrears of revenue.

Issue 1: The Appellant's eligibility for interest was in question regarding the period from the date of filing the refund claim. The lower authority observed the period from 13.09.2001 to 13.05.2008, whereas the Appellant claimed interest from 17.06.2001. The Tribunal cited the Balmer Lawrie & Co. Ltd. case, stating that interest is admissible three months from the date of filing the refund claim. Thus, the interest period was determined accordingly.

Issue 2: The rate of interest for the Appellants was disputed between 6% and 12%. Citing the Rajendra Kumar Jain case and the Supreme Court's decision in the Commissioner of Central Excise, Hyderabad vs. ITC. Ltd., the Tribunal directed the rate of interest to be 6%, not 12% as claimed by the Appellant.

Issue 3: The question of appropriating the interest sanctioned towards outstanding arrears of revenue was raised. The Ld. A.R. for the Revenue referred to the Anand Steel Rolling Works Pvt. Ltd. case, where the Gujarat High Court rejected the plea that the refund amount cannot be adjusted against arrears of revenue. The Tribunal found in favor of the Revenue on this issue, stating that the Appellant could not succeed in this regard. Consequently, the matter was remitted to the Adjudicating Authority for re-computation of interest at the rate of 6%, and the Appeal was partly allowed only on the issue of interest eligibility period.