The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the interest on Excise Duty Refund starts from the date of delay till the sanction of refund.
The revenue filed the present appeal against the order of Commissioner (Appeals). By the impugned order Commissioner (Appeals) allowed the appeal of the respondent, Raajratna Metal Industries Ltd, on the issue of eligibility of the interest on the refund sanctioned by the department. The ground taken by the department in the appeal is that the provisions of the Central Excise Act, namely Sections 11B and 11BB do not applied to the refund of Cenvat Credit.
It is department’s case that the provision of Sections 11B and 11BB, only apply to refund of duty and not to refund Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004. It was submitted that it was also contended in the appeal of the revenue that the matter was under continuous litigation and hence refund claim sanctioned once the litigation was over, therefore no interest is payable.
Rajesh Nathan, Assistant Commissioner (AR), appeared on behalf of the revenue reiterated the grounds of appeal.
Amal Dave, counsel appeared on behalf of the respondent submitted that, this very issue was considered by the Gujarat High Court in the case of Reliance Industries Ltd, wherein the High Court categorically held that provision of Section 11B and 11BB are applicable to the refund of accumulated Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004.
A Coram consisting of Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We find that the eligibility of Cenvat Credit in the above facts was extended by retrospective amendment of Rule 16 of Central Excise Rules, 2002. Whereby, the assessee becomes entitled for the Cenvat Credit on 13.07.2006. The revenue’s contention that the Rule 5 refund is not eligible for interest as the provisions of Section 11B and 11BB are not applicable, for such refund under Rule 5 is no longer under dispute in the light of the High Court of Gujarat judgment in the case of Reliance Industries Ltd.”
“Therefore, in our considered view the revenue was supposed to sanction the refund within three months from the date of retrospective amendment i.e. from 13.07.2006 however, the refund was sanctioned on 14.06.2012. Therefore, there is a delay in sanction of the refund after three months from the date of retrospective amendment dated 13.07.2006. Accordingly, we are of the view that the respondent is entitled for the interest only for the period i.e. from the date of three months of 13.07.2006 till the sanction of refund i.e. 14.06.2012” the Tribunal noted.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
