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TMI Blog2019 (3) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification dated 18.6.2012, the provisions of Section 11BB of the Central Excise Act would be clearly attracted. The learned counsel for the appellant revenue is unable to persuade this court to hold that the obligation to refund unutilized CEVANT Credit under Rule 5 of the CENVAT Credit Rules Notification dated 18.6.2012 is distinct and separate from the obligation under Section 11B of the Act. This Court concurs with the reasons assigned in the aforesaid decisions to hold that the revenue would be obliged to pay under interest for the delayed refund as contemplated under Section 11BB of the Act even for the delayed refund of the Unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules Notification dated 18.6.2012. This court is of the considered opinion that no substantial questions arise for consideration - appeal dismissed. - CENTRAL EXCISE APPEAL NOS. 40 AND 45 – 53 OF 2018 - - - Dated:- 1-3-2019 - MR. RAVI MALIMATH AND MR. B. M. SHYAM PRASAD JJ. APPELANT (BY SRI K.V. ARAVIND, ADVOCATE) RESPONDENT (BY SRI MIHIR MEHTA, ADVOCATE ALONG WITH SMT.G. L. SHILPI JAIN, ADVOCATE) JUDGMENT B.M. SHYAM PRASAD J., The appellant revenue ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner, Division C, Bengaluru examined the respondent s claim for refund, and vide its separate orders dated 21.6.2017 allowed such claims for refund as provided for under Rule 5 of the CENVAT Credit Rules 2004 read with Notification No.27/2012-CE(NT) dated 18.6.2012 (for short, CENVAT Credit Rules Notification dated 18.6.2012 ). However, the Assistant Commissioner, Division C, Bangalore did not grant interest for the delay in refund. 3. The respondent, being aggrieved by these orders, insofar as refusal of interest for the delay in the refund, filed Ten appeals before the Commissioner of Central Taxes (Appeals-1), who dismissed these Ten Appeals in No. 1091-1100 of 2017 holding that the respondent would not be entitled for payment of interest because the provision for payment of interest on delayed refund under Section 11BB of the Central Excise Act, 1944 would apply only where there has been excess payment or collection of duty. The Commissioner of Central Taxes (Appeals-1) emphasized that the principle for payment of interest for the delay in refund contained in Section 11BB of the Central Excise Act, 1944 cannot be extrapolated into Schema for refund of Unutilized CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 BB of the Act, the interest on the excess duty paid or collected is payable from the date of receipt of application till the date of refund of such duty at such rate which is not below 5% and not exceeding 30% p.a. as is fixed by the Central Government by Notification in the Official Gazette. However, under Rule 5 of the CENVAT Credit Rules Notification dated 18.6.2012, a manufacturer or a provider of output service is allowed refund of such unutilized CENVAT credit subject to such safeguards, conditions and limitations as may be specified. The unutilized CENVAT Credit lies in the account of the assessee and it is therefore distinct and separate from the excess duty paid or collected which would stand to the credit of the exchequer. As such, no recourse should be had to the provisions of 11BB of the Act to award interest in the event there is any delay in refund of unutilized CENVAT credit. 6. The learned counsel for the appellant - revenue argued that the Appellate Tribunal has not recorded any finding on the respondent s eligibility to interest under section 11BB of the Act, if interest is payable, the manner of computation of interest, the period of commencement for com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Scheme and the general provisions of Section 11BB of the Central Excise Act cannot be resorted to. The High Court of Gujarat concluded that the CENVAT credit is nothing but duty paid by the supplier of inputs which are dutiable goods manufactured by the supplier or dutiable services rendered by the service provider; when such goods/services are utilized for further manufacture or providing service, which are dutiable, the manufactured goods or service provided carry the duty paid by the Supplier of inputs as a component of its price/value. Hence, the duty payable on the ultimately manufactured goods/services rendered stands reduced to the extent of duty already paid on the inputs. Thus, the duty paid on inputs by the supplier has already been actually received by the exchequer. Therefore, there is a basic fallacy in the argument by the revenue that refund of unutilized CENVAT credit is different from excess duty paid or collected as contemplated under Section 11B of the Act. As such, the High Court of Gujarath held that when there is delay in sanctioning the refund under Rule 5 of the CENVAT Credit Rules Notification dated 18.6.2012, the provisions of Section 11BB of the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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