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2019 (3) TMI 1750 - HC - Central ExciseInterest on delayed refund - Section 11BB of Central Excise Act - HELD THAT - The High Court of Gujarat in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS RELIANCE INDUSTRIES LTD. 2010 (10) TMI 190 - GUJARAT HIGH COURT while considering a similar canvas against the payment of interest on delayed refunds under Section 11BB of the Central Excise Act in terms of the obligation to refund under Rule 5 of the Cenvat Credit Rules and Notification dated 18-6-2012 did not accept the canvas on behalf of the Revenue that the scheme for refund of unutilized Cenvat credit is a special beneficial scheme with self contained procedure providing for the manner and method of its implementation and hence any refund claimed under the Rules would be governed only by the provisions of the Scheme and the general provisions of Section 11BB of the Central Excise Act cannot be resorted to. The Learned Counsel for the appellant-Revenue is unable to persuade this Court to hold that the obligation to refund unutilized Cenvat credit under Rule 5 of the Cenvat Credit Rules and 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 and Notification dated 18-6-2012. This Court is of the considered opinion that no substantial questions arise for consideration and the appeals are dismissed - Decided against Revenue.
Issues:
1. Whether the Central Excise Tribunal was correct in allowing the respondent's appeal without recording specific findings on various controversies? 2. Whether interest under Section 11BB of the Central Excise Act is applicable to the refund of unutilized Cenvat credit? 3. Whether the Appellate Tribunal's order is sustainable due to non-application of mind? 4. Whether the Appellate Tribunal failed to determine the quantum of refund eligible for the assessee? Analysis: 1. The appellant-Revenue challenged the Final Order of the Appellate Tribunal which allowed the respondent's appeal against the Commissioner of Central Taxes' order. The appellant raised substantial questions regarding the correctness of the Tribunal's decision without proper reasoning or findings on the controversies. The Tribunal set aside the Commissioner's order based on a similar decision by the High Court of Gujarat, which was upheld by the Supreme Court. 2. The respondent claimed a refund of unutilized Cenvat credit, which was allowed by the Assistant Commissioner but without interest for the delay. The Commissioner held that interest under Section 11BB of the Central Excise Act was not applicable to such refunds. The Tribunal disagreed, citing the Gujarat High Court's decision. The appellant argued that Cenvat credit refund is different from excess duty refund, thus not warranting interest under Section 11BB. 3. The appellant contended that the Tribunal failed to address the eligibility for interest, computation method, and quantum of refund under Section 11BB. However, the respondent cited precedents from the High Courts of Madras and Gujarat, along with a Supreme Court decision, to support their stance that interest is payable for delayed refund of unutilized credit. 4. The High Court examined the Gujarat and Madras High Court decisions, concluding that interest under Section 11BB applies to delayed refunds of unutilized Cenvat credit. The Court agreed with the reasoning in the previous judgments and dismissed the appeals, emphasizing the Revenue's obligation to pay interest for delayed refunds. The Court also noted that the quantum of refund was undisputed based on the Assistant Commissioner's orders. In summary, the High Court upheld the Tribunal's decision, ruling that interest under Section 11BB is applicable to delayed refunds of unutilized Cenvat credit. The Court dismissed the appeals, citing previous judgments and emphasizing the Revenue's liability to pay interest for delayed refunds.
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