2014 (7) TMI 24 - AT - Central Excise

Appeal granted: Interest on refund from claim date.

SURAJBHAN SYNTHETICS (P) LTD. Versus COMMR. OF C. EX., HYDERABAD-IV

SURAJBHAN SYNTHETICS (P) LTD. Versus COMMR. OF C. EX., HYDERABAD-IV - 2014 (301) E.L.T. 386 (Tri. - Bang.) , 2017 (49) S.T.R. 98 (Tri. - Bang.) Issues:1. Eligibility for refund under the Cenvat Scheme.2. Calculation of interest on the refund amount.3. Interpretation of the law regarding the payment of interest on refund claims.Analysis:Issue 1: Eligibility for refund under the Cenvat SchemeThe case involved the appellants filing a refund application after opting out from the Cenvat Scheme to avail full exemption of duty on their products. The appellants paid an amount towards Cenvat credit and claimed a refund, which was initially rejected by the adjudicating authority. The Commissioner (Appeals) allowed the appeal with consequential relief, but the Committee of Commissioners filed an appeal with the Tribunal. The Tribunal rejected the Department's appeal, leading to the appellant filing for refund, which was sanctioned by the Assistant Commissioner under Section 11BB of the Central Excise Act, 1944. The appellant then filed an appeal before the Commissioner (Appeals) for interest on the refund amount.Issue 2: Calculation of interest on the refund amountThe Commissioner (Appeals) determined that the appellant was eligible for a refund after accounting for 3 months from the date of the Tribunal's order. However, the Department argued that interest should be payable from the date of filing the refund claim, not from the date of the Tribunal's order. The Tribunal referred to the case of Ranbaxy Laboratories Ltd. v. UOI & Ors., where it was held that the Revenue is liable to pay interest from the date of the refund claim application. As the refund claim was filed before the original authority on 29-5-2007, the interest had to be calculated from that date. The Tribunal allowed the appeal based on this interpretation.Issue 3: Interpretation of the law regarding the payment of interest on refund claimsThe Tribunal clarified that in cases where the dispute involves interest on a refund claim, the interest is payable from the date of filing the refund claim, not from the date of the final order. The Tribunal's decision was based on the settled law that interest under Section 11BB is payable from the date of the refund claim application. The Tribunal's ruling was in line with the interpretation provided in the Ranbaxy Laboratories Ltd. case, emphasizing the importance of calculating interest from the date of the refund claim submission.In conclusion, the Tribunal allowed the appeal, emphasizing that interest on the refund amount should be calculated from the date of the refund claim application, as per the provisions of Section 11BB of the Central Excise Act, 1944.