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2008 (7) TMI 420 - HC - Central ExciseRefund claim - Interest on refund denied - Held that - The documents evidencing payment of duty at both the occasions were already available on record because it is only on the basis of those two documents that the Assistant Commissioner had recorded finding that the duty has been paid on both the occasions. It is, thus, clear that the correlation could be established only on the basis of those two documents which were on record. A certificate was required to be submitted, by the appellate authority only to reinforce the fact that the duties have been paid at both the places. We thus find that the finding recorded in the order impugned that the applications for refund made by the petitioner were incomplete on the date of which they were received, is not sustainable and is contrary to the record and, therefore, is liable to be set aside. In the result therefore, petition succeeds and is allowed. The orders denying interest to the petitioner under Section 11BB of the Act impugned in the petition are set aside. Respondent no. 4 is directed to make order for payment of interest to the petitioner in accordance with law, in the light of this order and the provisions of Section 11BB of the Central Excise Act, within a period of four weeks from today.
Issues Involved:
1. Legitimacy of the rejection of the petitioner's refund claims. 2. Entitlement to interest on the refund claims under Section 11BB of the Central Excise Act. Detailed Analysis: 1. Legitimacy of the Rejection of the Petitioner's Refund Claims: The petitioner, a company engaged in the manufacture of motor vehicles, filed 47 claims for rebate/refund against exports made from July 1994 to January 1997, totaling Rs. 1,17,42,752/-. The claims were initially rejected by the Assistant Commissioner of Central Excise on two grounds: - The petitioner did not export fully built vehicles directly from their factory. - The petitioner only manufactured the chassis, not complete vehicles. Upon appeal, the order was set aside, and the matter was remanded for de novo adjudication in light of a CBEC circular dated 30-1-1997, which waived the condition of direct export from the factory if proof of actual export was provided. Despite this, the Assistant Commissioner again rejected the claims. The petitioner appealed again, and the Commissioner (Appeals) remanded the matter back, directing verification of documents. Subsequently, the Deputy Commissioner sanctioned the refund for 29 claims amounting to Rs. 82,74,070/-. The remaining 18 claims were also sanctioned later, totaling Rs. 34,68,682/-. 2. Entitlement to Interest on the Refund Claims under Section 11BB of the Central Excise Act: The petitioner claimed interest under Section 11BB of the Central Excise Act, which was denied by the authorities, stating that the refund applications were incomplete and only completed after the appellate order dated 30-7-1999. The petitioner argued that the applications were in the prescribed form and accompanied by necessary documents. The court reviewed the provisions of Section 11B and Rule 173S, which require applications to be in the prescribed form and accompanied by documents proving the payment of excise duty and non-passing of the duty burden. The court noted that the appellate authority had found the applications to be covered by the CBEC circular and that the only inquiry required was the correlation of chassis numbers in duty-paying documents. The appellate authority did not find the applications incomplete but required a certificate to reinforce the fact of duty payment at both stages. The court concluded that the applications were complete and that the finding of the revisional authority was unsustainable. Conclusion: The court held that the rejection of the petitioner's refund claims was not justified, and the applications were complete as per the requirements. The petitioner was entitled to interest under Section 11BB of the Central Excise Act, as the refund was not made within three months from the date of receipt of the applications. The orders denying interest were set aside, and the respondent was directed to pay interest to the petitioner within four weeks.
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