2014 (11) TMI 160 - AT - Central Excise

Tribunal grants interest to appellant for delayed refund claim under Central Excise Act

M/s. Sterlite Industries Limited Versus Commissioner of Central Excise & ST., Vapi

The Tribunal allowed the appeal filed by M/s. Sterlite Industries Limited, granting the appellant interest for the delay in sanctioning the refund claim. ... Interest on delayed refund - Revised refund claim - first appellate authority while rejecting the claim of interest observed that the delay in sanction of refund claim was due to non-furnishing of documents by the appellant and not due to the Revenue. Held that:- Date of filing of refund claim has been taken as 27.09.2004 to reject/ sanction the refund claim of the appellant which was sanctioned on 09.3.2006. Assistant Commissioner, Central Excise, Div-II, Silvassa vide letter dated 03.11.2004 raised certain queries but did not return the refund claim filed by the appellant. No efforts were made by the Revenue to reject the refund claim as unsubstantiated when appellant was not providing the required details/ documents. There was thus a delay in sanctioning the refund claim of the appellant from three months after 27.09.2004 to 09.3.2006. Accordingly, it is held that interest on delayed payment of refund of accumulated CENVAT credit under Rule 5 of the Cenvat Credit Rules, 2004 read with Section 11B is admissible to the appellant under Section 11BB of the Central Excise Act, 1944. Similar view has been expressed by this bench in the case of Reliance Industries Limited vs. CCE, Vapi (2008 (7) TMI 324 - CESTAT AHMEDABAD) and Gujarat High Court in the case of CCE vs. Reliance Industries Limited (2010 (10) TMI 190 - GUJARAT HIGH COURT) - Decided in favour of assessee. Issues:- Delay in sanctioning refund claims- Payment of interest for delay in refund claimsAnalysis:The appeal was filed by M/s. Sterlite Industries Limited against the order passed by the Commissioner (Appeals) Vapi regarding the payment of interest for the delay in sanctioning refund claims. The appellant initially filed a refund claim on 27.09.2004 for a specific amount, which was later revised on 08.12.2005. The adjudicating authority sanctioned a partial amount of the refund claim, leading the appellant to file a claim for interest due to the delay in sanctioning the refund. The first appellate authority rejected the appellant's claim, stating that the delay was caused by the appellant's failure to provide necessary documents and that the refund was not filed under Section 11B, thus not qualifying for interest under Section 11BB of the Central Excise Act, 1944.During the appeal, Ms. Dimple Gohil, representing the appellant, argued that the export period and the date of filing the refund claim were crucial factors. She contended that interest should be applicable for the period from the date of filing the claim to the date of its sanction. She also cited Notification 11/2002-CE (NT) dated 01.3.2002 to support the admissibility of interest under Section 11BB. Additionally, she referenced relevant case laws to strengthen the appellant's case.On the other hand, Shri Alok Srivastava, representing the Revenue, defended the first appellate authority's decision, attributing the delay to the appellant's failure to provide documents promptly. After hearing both sides and reviewing the case records, it was observed that the refund claim was decided under Rule 5 of the Cenvat Credit Rules, 2004, along with Section 11B of the Central Excise Act, 1944. The order clarified that interest provisions under Section 11BB were indeed applicable to refunds under Rule 5 of the Cenvat Credit Rules, 2004.The Tribunal noted that there was a delay in sanctioning the refund claim from the date of filing to the date of sanction, making the appellant eligible for interest under Section 11BB. It was emphasized that the Revenue did not take steps to reject the claim promptly when documents were not provided by the appellant. Therefore, the Tribunal allowed the appeal, granting the appellant consequential relief based on the delay in sanctioning the refund claim and the applicable interest provisions.