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2019 (3) TMI 1750

..... MI 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 de .....

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..... ts and in the circumstances of the case, the order of CESTAT is sustainable due to non-application of mind for the reason that Commissioner (Appeals) has passed an order of remand on the partial refund rejected by the adjudicating authority, setting aside of the order of remand would lead to confirmation of the order of the adjudicating authority and in turn justifying the partial rejection of refund claim and in the absence of any finding regarding controversy under Section 11BB of Central Excise Act, even the order of the CESTAT cannot be inferred to be order on the interest under Section 11BB of the Central Excise Act and recorded perverse finding? 5. Whether on the facts and in the circumstances of the case, CESTAT failed to record a finding regarding the quantum of refund the assessee could be eligible in view of the specific dispute on the quantum and the consequential interest on such quantum of refund? 2. The present appeals arise in the following circumstances : The respondent offered Information Technology Software Services, as defined under the Finance Act, 1994, to its foreign clients under the Service Agreement concluded with them. The respondent furnished FI .....

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..... th the Appellate Tribunal, and the Appellate Tribunal, by its impugned final order dated 21-2-2018, set aside the common order in Appeals in Nos. 821 and 822 of 2017 holding that the appellate order by the Commissioner of Central Taxes (Appeals-1) cannot be sustained. The Appellate Tribunal relied upon the decision of the High Court of Gujarat at Ahmedabad in Commissioner of Central Excise v. Reliance Industries Ltd., reported in 2010 (259) E.L.T. 356 (Gujarat). The Appellate Tribunal also observed that the decision of the High of Gujarat was challenged before the Hon ble Supreme Court [2011 (274) E.L.T. A110 (S.C.)] but such challenge was unsuccessful. 5. The Learned Counsel for the appellant-Revenue argued that payment of interest on delayed refund is payable under Section 11BB of the Central Excise Act, 1944 (for short, the Act ), if the claim for refund is under Section 11B of the Act. However, the present claim by the respondent is for the refund of the unutilized Cenvat credit under the Cenvat Credit Rules and Notification dated 18-6-2012. As such, the Department/Revenue cannot be called upon to pay interest for delay in refund of the unutilized Cenvat credit under Secti .....

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..... ellant-Revenue did not succeed in the said appeal. Therefore, the appellant-Revenue cannot reagitate the issue again. 8. The Learned Counsel further contended that the manner of computation of interest is also settled in view of the decision of the Hon ble Supreme Court in Ranbaxy Laboratories v. Union of India reported in 2011 (273) E.L.T. 3 (S.C.) wherein, the Hon ble Supreme Court has declared that the liability of the Revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the three months period from the date on which the order of refund is made. There cannot be any quarrel over the quantum of refund in view of the orders of the Assistant Commissioner, Division C, Bengaluru. Therefore, the impugned order does not suffer from any irregularity or perversity. 9. The rival submissions are examined in the light of the decisions by the High Court of Gujarat as well as High Court of Madras. The High Court of Gujarat in the case of Commissioner, Central Excise v. Reliance Industries Limited supra, while considering a simi .....

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..... igation 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 in the light of the reasoning in the aforesaid decisions. 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. There is also considerable force in the submissions on behalf of the respondent that in view of the decision of the Hon ble Supreme Court Ranbaxy Laboratories v. Union of India reported in 2011 (273) E.L.T. 3 (S.C.) that there cannot be any dispute about the liability of the Revenue to pay interest under Section 11BB of the Act commencing from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act. The Appellate Tribunal has referred to this decision in its impugned order. Similarly, in view of the orders of the Assistant Commissioner, Division .....

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