Tribunal has no Jurisdiction to Prescribe Rate of Interest which is Prescribed by Government of India in terms of Notification issued u/s 11BB of Central Excise Act: CESTAT [Read Order]

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the Tribunal has no jurisdiction to prescribe rate of interest which is prescribed by Government of India in terms of Notification issued under Section 11BB of Central Excise Act,1944.

The appellant, M/s Jalan Castings Pvt. Ltd, has opted to carry out his operations in terms of Section 3A of the Central Excise Act, 1944 as inserted by the Finance Act, 1997 read along with the Induction Furnace Capacity Determination Rules, 1997 and Rule 96 ZO of the Central Excise Rules, 1944.

Undisputedly in the present case the application for the refund has been made by the appellant. This application for the refund was rejected by the Assistant Commissioner of Central Excise. the Commissioner (Appeals) also upheld the order of the Assistant Commissioner.

The entire proceedings in the matter are in respect of Application for Refund filed by the appellant under Section 11B of the Central Excise Act, 1944 on 06.09.2010. Revenue has throughout treated the application to be made in under Section 11B and even the order dated 19.03.2019 allowed the refund in favour of appellant holding that the refund is to be sanctioned in favour of the appellant as per the section 11 B of the Central Excise Act, 1944.

A Single Bench of Sanjiv Srivastava, Technical Member noted that “I am firmly of the view that the request appellant for interest on the refund will have to be considered only in terms of Section 11BB of the Central Excise Act, 1944 and in the manner as prescribed by the said section.”

The Bench relied on the judgment of the Supreme Court has in the case of Northern Plastics, wherein it was held that Tribunal has no jurisdiction to prescribe the rate of interest which is prescribed by the Government of India in terms of Notification issue under Section 11BB of the Central Excise Act, 1944.

The Tribunal thus noted that the appeal filed by the appellant is to be partly allowed to extent of interest due to them in terms of section 11BB taking the date of filing the application for refund as 06.09.2010.

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