2018 (4) TMI 214 - AT - Central Excise

Interest on delayed refund - relevant date - CBEC circular No.802/35/2004-CX dt. 08/12/2004 - Held that - the assessee is entitled to interest which will commence after the expiry of three months after final disposal of the dispute. In the present case, the Tribunal allowed the appeal of the appellant vide its Final Order dt. 09/08/2007, whereas the refund was granted finally to the appellant on 12/02/2013 - for the delay in granting the refund, the appellant is entitled for interest from the date of expiry of three months from the date of the Final Order till the refund was finally granted. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund of predeposit amount and interest entitlement.

Analysis:
The appeal was against the rejection of refund claim by the Assistant Commissioner, concerning the predeposit of duty. The appellant had initially filed an appeal before the Commissioner(Appeals) against the duty proposed to be recovered. The Tribunal, in Final Order No. 935/2007, set aside the demand and allowed the appeal of the appellant. Subsequently, the appellant requested a refund of the predeposit amount based on CBEC instructions. However, the Department did not refund the amount, leading the appellant to seek a refund directly. The Assistant Commissioner rejected the refund claim as time-barred, citing Section 11B of the Central Excise Act. The Commissioner(Appeals) later directed the adjudicating authority to sanction the refund claim. Despite this, the Assistant Commissioner issued a show-cause notice proposing to reject the refund claim. The appellant contested the proposal, leading to the Assistant Commissioner sanctioning the refund without interest. The appellant then filed an appeal before the Commissioner(Appeals) against the non-granting of interest on the delayed refund.

In the appeal, the appellant argued that the impugned order not granting interest was against CBEC circulars and various court judgments entitling the assessee to interest if the refund was not made within three months from the order granting refund. The appellant relied on Circular No. 802/35/2004-CX and court decisions such as JOI Vs. Nelco Ltd., CCE, Hyderabad vs. ITC Ltd., Oil India Ltd. vs. CCE, Dibrugarh, CCE, Pune-lll vs. SMZS Chemicals Ltd, and Estee Auto Pressings (P) Ltd. vs. CCE, Chennai-Il to support their argument for interest entitlement.

After considering the submissions and judgments, the Tribunal held that the issue of interest entitlement was settled by various decisions, stating that the assessee is entitled to interest after three months from the final disposal of the dispute. In this case, the Tribunal's final order was dated 09/08/2007, and the refund was granted on 12/02/2013, resulting in a delay. Therefore, the Tribunal allowed the appeal of the appellant by setting aside the impugned order and ruling that the appellant is entitled to interest for the delay in granting the refund.

The Tribunal's decision was pronounced on 07-02-2018.