2016 (12) TMI 92 - AT - Central Excise

Refund claims - Rule 5 of Cenvat Credit Rules, 2004 - manufacture of two wheeled motor vehicles - the appellants were engaged in exporting the manufactured goods, and they were not in a position to utilize the Cenvat Credit of duty paid on the inputs - Held that - The refund claims were admittedly filed in the year 2005-2006 and was laying with the jurisdictional Central Excise authorities till 2008. Prior to April, 2008 no inquiries were made by the jurisdictional Central Excise authorities and no deficiency was pointed out by them. The claims were filed in form A along with statements showing details of ARE -1. Inasmuch as the invoices / export invoices / shipping bills / bills of lading and airways bills and product-wise invoices used and cenvat credit taken on each invoice bill was certified by the Cost Accountant and produced. It is for the first time in April, 2008 that the appellants were directed to submit the fact of showing the dues from the Government in their balance sheet. Apart from the fact that the said reflection of dues from the Government from the balance sheet is not relevant for the purpose of grant of refund, the fact remains that the Revenue slept over the refund claims for the period of two years. Meanwhile the manual provisions referred to by the learned advocate clearly show that the deficiency in papers should be pointed out to the assessee within a period of 15 days. There is no reason shown in the impugned orders as to why the refund claim were not taken up for disposal prior to April, 2008. The provisions of section 11BB of the Central Excise Act are clear and not ambiguous requiring the Revenue to sanction interest if the refund claims were not disposed of within a period of three months from the date of filing. Otherwise also, I find that earlier Tribunal order allowed the assessees appeal with instruction to the Revenue to pay the interest to the assessee. There appeals were allowed and were not remanded to the original adjudicating authority to decide the appellants claim of interest afresh. The said order of the Tribunal having attained the finality, it was not open to the jurisdictional Assistance Commissioner to redecide the issue of interest. He was only expected to quantify the interest and pay the same to the assessee in terms of earlier order of the Tribunal and it was not open to him to redecide the issue of interest - appeal allowed - decided in favor of appellant.

Summary

Issues: Refund claims for duty paid on inputs, claim of interest on delayed refund, jurisdictional authority's rejection of refund claim, appellate authority's denial of interest, applicability of Section 11BB, estoppel in taxation matters, rejection of claim due to incomplete documentation, delay in processing refund claims, jurisdictional authority's failure to point out deficiencies, finality of earlier Tribunal order on interest payment.

Refund Claims and Interest Claim:
The appellant, engaged in manufacturing two-wheeled motor vehicles, filed refund claims for unutilized Cenvat Credit of duty paid on inputs as they exported the vehicles. The claims were filed in 2005-2006 but were pending until 2008. The jurisdictional Central Excise authorities allowed the claims without interest after the appellants mentioned they would not claim interest due to urgency. Subsequently, the appellants sought interest on the delayed refund, leading to appeals before the Commissioner (Appeals).

Appellate Authority's Decision:
The Commissioner (Appeals) rejected two appeals as time-barred and the third on the grounds of the appellants waiving their interest claim. However, the Tribunal, citing the Hero Motors Ltd. case, held that there is no estoppel in taxation matters, and consent given by the assessee cannot waive their statutory right to interest under Section 11BB beyond three months from the refund claim date.

Rejection of Refund Claim and Documentation Issue:
The jurisdictional Central Excise authorities sanctioned a partial refund but rejected the balance due to incomplete documentation. The Commissioner (Appeals) upheld this decision, stating that the claim is considered filed only when all relevant documentation is submitted, and since the last document was provided in April 2008, interest could not be claimed from three months after the initial filing date.

Delay in Processing and Finality of Tribunal Order:
The appellant argued that no action was taken on the refund claims until 2008, despite the claims being filed with complete documentation in 2005-2006. The Tribunal noted that the Revenue failed to point out deficiencies within the stipulated time frame, and the provisions of Section 11BB mandate interest payment if claims are not processed within three months. Additionally, the Tribunal's earlier order directing interest payment had attained finality, precluding the jurisdictional authority from revisiting the interest issue.

Conclusion:
The presiding Member set aside the impugned order and allowed the appeal, emphasizing the Revenue's obligation to pay interest under Section 11BB for delayed refund claims. The decision highlighted the importance of timely processing, complete documentation, and adherence to statutory provisions in refund claim cases.