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2019 (7) TMI 1460 - AT - Central ExciseInterest on delayed refund - refund claims were sanctioned by the Department with a delay of more than three months from the date of filing of the said claims - HELD THAT - The admissibility of interest for delayed cash refund of accumulated CENVAT Credit under Rule 5 of CENVAT Credit Rules, 2004 has been settled in favour of the assessee by various High Courts including jurisdictional Bombay High Court. Recently, the Hon'ble Karnataka High Court following the principles laid down by the Hon'ble Supreme Court in RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT held that Liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. The interest is admissible on the delayed cash refund sanctioned under Rule 5 of the CENVAT Credit Rules, 2004 - However, the learned AR for the Revenue submits that neither in the adjudication order nor in the Commissioner s (Appeals) finding, exact amount of interest claimed has been mentioned. Therefore, for quantification of interest admissible to the appellant, the matter should go back to the adjudicating authority. Appeal allowed by way of remand.
Issues:
Admissibility of interest for delayed cash refund of accumulated CENVAT Credit under Rule 5 of CENVAT Credit Rules, 2004. Analysis: The case involved two appeals filed against orders passed by the Commissioner of Central Excise (Appeals), Pune-I regarding the rejection of interest claims for delayed cash refund of accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004. The appellants, being 100% EOU, had filed refund claims which were sanctioned by the Department with a delay of more than three months. The issue revolved around the admissibility of interest for the delayed period of cash refund sanctioned to them. The appellant's advocate cited various judgments, including those by the Hon'ble Gujarat High Court, Hon'ble Supreme Court, and Hon'ble Bombay High Court, to support the claim for interest on delayed refunds under Rule 5. The Revenue, represented by the AR, reiterated the findings of the learned Commissioner (Appeals). Upon examining the submissions and perusing the records, the Member (Judicial) found that the admissibility of interest for delayed cash refund under Rule 5 of CENVAT Credit Rules, 2004 had been settled in favor of the assessee by various High Courts, including the jurisdictional Bombay High Court. The judgment highlighted the observations made by the Hon'ble Karnataka High Court, which aligned with the principles laid down by the Hon'ble Supreme Court in previous cases. The judgment emphasized that there is a statutory obligation on the part of the revenue to pay interest for delayed refunds of duty paid on inputs. The Member (Judicial) concurred with the reasoning in the cited decisions and held that interest is payable for delayed cash refunds under Section 11BB of the Central Excise Act. In conclusion, the judgment set aside the impugned order and remanded the appeals to the adjudicating authority for quantification of the interest payable to the appellant for the delayed period. The appeals were allowed by way of remand, following the established legal principles regarding the admissibility of interest on delayed cash refunds under Rule 5 of the CENVAT Credit Rules, 2004.
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