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Commissioner of Central Excise, Thane-II Versus Western Cans Pvt. Ltd.

2015 (10) TMI 368 - CESTAT MUMBAI

Claim of interest on refund - delayed refund has been sanctioned u/s 11B - Held that:- It is clear from the facts of the case that department had not carried out the necessary verifications while disposing of the refund applications and when the matter reached to the Hon'ble CESTAT it categorically directed to conduct verification to clinch the issue. Therefore, there was no fault on the part of the appellants and the appellants were not responsible for delay that was caused for coming to correc .....

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: Revenue's appeal is directed against Order-in-Appeal No. PD/606/Th-II/2014 dtd. 19/6/2014 passed by the Commissioner of Central Excise & Service Tax (Appeals-IV), Mumbai-I, wherein the Ld. Commissioner (Appeals) has allowed the appeal of the appellant directing the department to pay interest on refund amount sanctioned as per the provision 11B of Central Excise Act, 1944 for the period of delay in sanctioning the refund. The issue involved in the present case whether appellant is entit .....

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r of the CESTAT wherein certain information was directed to be verified therefore the refund was not mature before passing denovo order, for this reason also there is no delay on the part of the Revenue for sanctioning refund claim. Hence, Ld. Commissioner (Appeals) has wrongly sanctioned the claim of interest to the respondent. 3. On the other hand, Shri. J. N. Tiwari, Ld. Counsel for the respondent submits that now law on interest is finally settled by the Hon'ble Supreme Court's judgm .....

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ths all the aspect must be verified by the Revenue and the refund application should be disposed of within such stipulated time period. If at all any information is required, the same can be asked for and verified within the such given time. On this ground Revenue can not escape from payment of interest which otherwise legitimately available to the respondent. He further submits that even though the matter was remanded by the Tribunal but fact remains that after all the litigation once refund is .....

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oidably payable to the assessee. On careful reading of the Commissioner (Appeals) order, I find that he has given elaborated findings and allowed interest on the refund, the findings is extracted below: 4. I have gone through the appeal papers, written submissions during the course of personal hearing and above mentioned relied upon instructions and orders/judgments passed by the various Tribunals and High Courts/Supreme Court. I find as mentioned below. 5. I find that the brief question to be d .....

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b-section (1) of that section, there shall be paid to that applicant interest at such rate, [not below five per cent] and not exceeding thirty per cent per annum as is for the time being fixed [by the Central Government, by notification in the Official Gazette], on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty.' Explanation. Where any order of refund is made by the Commissioner (Appeals), .....

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said Act, it has been laid down that in case amount is not refunded by the department within three months from the date of application, then the department is obliged to pay interest, calculated at the rate notified by the Central Government, to the claimant from the date of expiry of three months from the date of receipt of application till the date of refund of such duty. 8. I further find that vide explanation to the said Section 11BB of the said Act it has been explained that in case any ord .....

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d Circular, is as mentioned below. '2. In this connection, Board would like to stress that the provisions of section 11BB of Central Excise Act, 1944 are attracted automatically for any refund sanctioned beyond a period of three months. The jurisdictional Central Excise Officers are not required to wait for instructions from any superior officers or to look for instructions in the orders of higher appellate authority for grant of interest.' 10. I find that vide said Circular it has been .....

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and the department cannot take contrary stand. 11. I find that the only contention of the department to reject the claim of interest of the appellants is that the department conducted certain verifications as per directions of the Hon'able CESTAT, vide its order dated 09.03.2011; that the order has been passed within time period of three months from the date of latest/last information/clarification that was made available to the department and hence the provisions of Section 11BB of the sai .....

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appellants were not responsible for delay that was caused for coming to correct decision in the matter. 13. I find that issue of applicability of provisions of Section 11BB of the said Act in such cases is also settled by the Apex Court vide below mentioned judgments. a. Ranbaxy Laboratories Ltd. V/s UOK reported at 2011 (273) ELT 3 (SC) . b. Commr of C.Ex. & Cus. V/s J K Drugs & Pharmaceuticals reported at 2012 9280) ELT 365 (All.) c. Commr of C.Ex. & Cus., Hyderabad V/s Shanti Auto .....

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