TMI Blog2005 (7) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Rules, 2001/2002. These claims were sanctioned to them, albeit belatedly. As the amounts refunded by the department were received by the appellants beyond the period of three months prescribed under sub-section 1 of Section 11BB of the Central Excise Act, they claimed interest on these amounts for the period of delay. These claims were rejected by the original authority and the first appellate authority, both of which held that no interest was admissible to any amount of Modvat credit refunded under Rule 5 ibid. Hence these appeals. 2. After hearing both sides, I find that the question to be decided upon is whether the provisions of Section 11BB are applicable to a claim of interest on an amount of Modvat credit belatedly refunded und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to a claim for refund of input duty credit filed under Rule 5. In all other respects, according to SDR, Section 11B stands excluded from the area occupied by refund claims under Rule 5 and, consequently, the interest provisions of Section 11BB are inapplicable to such refunds. 3. After giving careful consideration to the submissions, I find that the refund claims in question were allowed under Rule 5. What was prescribed by Notification No. 11/2002-C.E. (N.T.) issued under Rule 5 was the procedure for the filing and processing of refund claims under the said Rule. Once such a claim is allowed by the authority, the procedure laid down under the Notification stands exhausted. The question whether any interest is payable on the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Had there been any clearance of final product from the assessee's factory for home consumption, they would have utilised this amount for payment of duty on such product. In the event of irregular availment of Modvat credit by the assessee, the department would quickly step in with a demand of duty on them. Thus, having regard to the concept of Cenvat credit, it has to be held that the view taken by the department in the instant case is illogical. In any case, after the Board's Circular dated 1-10-2002, the Revenue cannot plead that refund of input duty credit is not refund of duty. 5. In the result, interest is liable to be paid by the department to the appellants on the refunded amount of input duty credit for the period of delay beyo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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