2008 (10) TMI 152 - AT - Central Excise

Interest on the rebate claims - delay in sanction of rebate no any reason to interfere with the impugned order holding that interest is liable to paid when there is delay in payment unless Revenue is able to show that rebate claim was incomplete - whether the Letter of Undertaking may be used for export of exempted goods also - it is clear that the all goods specified in CET are excisable goods whether it is dutiable or exempted - LUT is therefore valid for the export of all excisable goods i.e. dutiable as well as exempted goods - validity of the LUT therefore cannot be restricted for the export of exempted goods i.e. goods attracting nil rate of duty in CET

Summary

Issues:
1. Whether interest on rebate claims is admissible.
2. Whether Letter of Undertaking (LUT) is required for export of exempted goods.

Analysis:
1. Interest on Rebate Claims:
The Revenue challenged the order of the Commissioner (Appeals) regarding the admissibility of interest on rebate claims. The delay in rebate sanction was attributed to the respondents' letter excluding waste elements and correspondence with Revenue. The JCDR argued that LUT is necessary to cover duty liability, even for exempted goods. However, the CA for respondents contended that the delay was not due to their letter and cited CBEC manual and previous case law to support that LUT is required for all excisable goods. The Tribunal upheld the Commissioner (Appeals) decision, stating that interest is payable for delayed payments unless the rebate claim was incomplete. The appeals by Revenue were rejected.

2. Letter of Undertaking (LUT) for Exempted Goods:
The second issue revolved around whether LUT is mandatory for exporting exempted goods. The Commissioner (Appeals) analyzed Rule 19 of the Central Excise Rules, 2002, and a related notification, emphasizing that the Letter of Undertaking in Form UT-1 is valid for all excisable goods, including exempted ones. Referring to the Central Excise Act, it was clarified that all goods specified in the Central Excise Tariff are considered excisable, irrespective of duty status. Therefore, the Tribunal concluded that LUT cannot be restricted to dutiable goods and is applicable to all excisable goods, including those with a "nil" duty rate. Consequently, the appeals filed by Revenue challenging the LUT requirement for exempted goods were also dismissed.

In summary, the Tribunal upheld the Commissioner (Appeals) decisions on both issues, affirming the admissibility of interest on rebate claims and the necessity of a Letter of Undertaking for exporting exempted goods. The judgments in favor of the respondents were based on legal provisions, precedents, and a comprehensive interpretation of relevant rules and notifications.