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2015 (11) TMI 1159 - CESTAT KOLKATA

2015 (11) TMI 1159 - CESTAT KOLKATA - TMI - Denial of interest claim - Interest on delayed refund - Scope of Section 11BB - Held that:- Appellant are entitled to the claim of interest on delayed refund of CENVAT Credit on the four applications filed between 25.07.1994 and 28.04.1995. From the table mentioned as above it seems that the interest amount against the delayed refund claims were calculated taking the date of filing of such claims as the relevant date. However, for pending refund claims .....

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, as the case may be, taking the relevant date as 26.08.1995. - Appeal disposed of. - Appeal No.EA-229/08 - ORDER NO.FO/A/75664/2015 - Dated:- 20-11-2015 - Dr. D.M. Misra, Member(Judicial) For the Petitioner : Shri Kartik Kurmi, Advocate & Shri S.B.Sharma, Advocate For the Respondent : Shri A.K.Biswas, Supdt.(AR) ORDER Per Dr. D.M. Misra. 1. This Appeal is directed against Order-in-Appeal No.19/RAN/2008 dated 04.02.2008 passed by the Commissioner(Appeals) of Central Excise & Service Tax, .....

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of the Central Excise Act, 1944 amounting to ₹ 36,67,461/-, which later revised to ₹ 37,28,253/- on 10.08.2002 shown as below: S.No. Amount of refund claim (Rs.) Date of submission of refund claim Date of sanction of refund claim Date of payment of refund amount No. of days of delayed payment after deducting 90 days Amount of interest calculated @ 15% per annum(Rs.) 1 2,78,604.54 25.07.94 03.04.01 03.04.01 2265 2,59,331.41 2 11,25,758.53 25.07.94 03.04.01 03.04.01 2265 10,47,880.71 3 .....

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he present appeal. 4. The ld.Advocate Shri Kartik Kurmi for the appellant submits that there is no dispute on the eligibility of refund which arose, on account of export of goods, in accordance with Rule 57F(4) of erstwhile Central Excise Rules, 1944 pertaining to unutilized MODVAT Credit on inputs used in the manufacture of final products exported to Nepal. He submits that the refund of interest was erroneously rejected on the grounds that section 11BB of Central Excise Act, 1944 is not applica .....

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issues has been settled and therefore interest on delayed refund is admissible to them. On the issue of applicability of section 11BB of CEA1944 to to MODVAT credit refunds, the ld. Advocate referred to the judgement of the Hon ble Gujarat High Court in the case of Commissioner of Central Excise vs. Reliance Industries Ltd. -2010 (259) ELT 356(Guj.) which has been upheld by the Honble Supreme Court reported as Commissioner vs. Reliance Industries Ltd. - 2011 (274) ELT A-110(SC). Also, similar .....

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Cement Works vs. Asstt. Commissioner of Central Excise & Customs - 2004 (170) ELT 4 (Raj.) which has been confirmed by the Hon ble Supreme Court in the case of Ranbaxy Laboratories Ltd. vs. UOI 201 (273) ELT 3 (SC). Further, he has pleaded that in the case of Siddhant Chemicals vs. UOI 2014 (307) ELT 44(Allahabad), their Lordships following the Circular No.670/61/2002-CX dated 01.10.2002 held that payment of interest under section 11BB of Central Excise Act, 194 is not dependent on the claim .....

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e amount to the appellant. The dispute centers around the claim of interest for delayed period of the refund. It is the case of the appellant that even though they were eligible to refund of CENVAT Credit, the refund was not sanctioned to them within three months from the date of incorporation of section 11BB in the Central Excise Act, 1944 ( i.e. 26.05.1995), hence they are eligible to the interest amount for the delayed period from 26th Aug.1995. I find that the Revenue has rejected the intere .....

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bunal. From the above rival contentions, it is clear that there is no dispute on facts, but the issues revolve around pure questions of law which need to be addressed in the present appeal. I need not have to dwell on the detailed arguments advanced by both sides on the said issues in analyzing the relevant provisions of law as these issues are settled by now. On the issue of applicability of 11B & Sec.11BB to CENVAT Credit refunds under Rule 5 of CENVAT Credit Rules,2002/2004, the Hon ble G .....

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attracted and as such the Tribunal was justified in holding that the provisions of clause (c) of the proviso to sub-section (2) of Section 11B and consequently Section 11BB of the Act are clearly applicable to the facts of the present case and as such the respondent is entitled to interest on delayed refund of Cenvat Credit as claimed by it. 13. Another aspect of the matter is that when Section 11BB of the Act had newly been inserted by the Finance Act, 1995, the Government of India, Ministry o .....

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issued by the Central Government refunds under Rule 57F of the erstwhile Central Excise Rules, 1944 would be governed by the provisions of Section 11BB of the Act. Rule 57F of the said Rules made provision for the manner of utilisation of inputs and credit allowed in respect of duty paid thereon. Sub-rule (13) of rule 57F made provision for refund of accumulated credit in case where for any reason it was not possible to adjust the same in the manner provided under the said sub-rule. Sub-rule (13 .....

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A110(SC). Thus, provisions of Sec.11BB of CEA,1944 is applicable to Modvat Credit Refunds under Rule 57F of erstwhile Central Excise Rules,1944. 9. The Applicability of Sec.11BB to the refunds filed prior to incorporation of the said provision in the Central Excise Act,1944 has been addressed by the Honble Rajastan High Court in J.K.Cement Works case(supra) as follows: 21. The perusal of Section 11B goes to show that it prescribed a period within which the amount of refund can be claimed by th .....

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ly found to be payable liability is with effect from expiry of three months of the date of receipt of application required to be made under Section 11B(1). The rate of interest is to be prescribed by the Board and the interest is payable with effect from the date commencing from the expiry of three months from the date of receipt of such application till the refund of such duty. 22. The proviso to Section 11BB also takes care of the cases where refund became due prior to the insertion of proviso .....

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ay interest w.e.f. 26-8-95 until the date of actual payment. 23. The scheme of payment of interest on belated payment of refund under the Central Excise Act, 1944 is one integrated within the provisions of Section 11B and 11BB. They have to be read together 10. Rejecting the argument that the date of application for refund is not relevant but the date of final Order of the Tribunal is relevant for computation of interest under Sec.11BB, their Lordships have observed as: 32. This brings in the qu .....

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licant and not to be transferred to the Consumer Welfare Fund but the relevant date is to be determined with reference to date of application laying claim to refund. The non-payment of refund to the applicant claimant within three months from the date of such application or in the case governed by proviso to Section 11BB, non-payment within three months from the date of the commencement of Section 11BB brings in the starting point of liability to pay interest, notwithstanding the date on which d .....

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l only on 15-12-2002, but as the application to claim refund has been filed much earlier before the date when it was required to be filed and the amount having not been made within three months from the date of application, the applicant became entitled to interest with effect from the such date on principal amount to be refunded to him ultimately pursuant to an order made u/s 11B(2) at the rate notified by the Board from time to time, with effect from the date of expiry of three months from the .....

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statutory provision for payment of interest no mandamus could be issued for payment of interest for the period prior to one provided in Section 11BB. 41. However, Proviso to Section 11BB which makes the provision applicable to pending applications if the refund amount is not paid within three months from the date Finance Bill received assent of the President, the entitlement of the petitioner to claim refund from such date cannot be denied to him. 42. Accordingly the petition is allowed, the re .....

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the petitioners. The order shall be complied within a period of two months from the date of receipt of writ or submission of certified copy of this order before appropriate officer whichever is earlier. 12. The aforesaid judgment was upheld by the Hon ble Supreme Court while rejecting the SLP filed by the Revenue reported as Asst. Commissioner Central Excise Vs. J.K.Cement Works 2005 (179) ELTA150(SC). Also, the principle laid in J.K.Cement Works case that date of application for refund would b .....

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undable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made .....

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