2016 (2) TMI 452 - AT - Central Excise

Commissioner's denial of interest on rebate amounts overturned by Tribunal under Central Excise Act

Commissioner of Central Excise, Chennai-IV Versus M/s Hindustan Petroleum Corporation Ltd.

The Commissioner (Appeals) erred in denying interest on rebate amounts to the respondent. The Tribunal upheld the respondent's entitlement to interest ... Interest on rebate (refund) - whether Commissioner (Appeals) committed error in granting interest to the respondent from the date of the expiry of three months of the application for a rebate - Held that:- Section 11BB of the Central Excise Act, 1944 has mandate that interest is payable on any rebate or refund claim, if such a claim is not paid within three months of the application made in that behalf. Respondent's application not being entertained within three months of the respective dates as stated above, entitlement to the interest arose under section 11BB of the Central Excise Act, 1944. In view of the aforesaid factual position and the law as well as decision of the Tribunal in the case of Jayanta Glass Industries Pvt. Ltd. Vs Commissioner of Central Excise, Kolkata-III (2007 (11) TMI 107 - CESTAT, KOLKATA ), Revenue's appeal is dismissed. - Decided in favour of assessee Issues:1. Granting of interest to the respondent from the date of the expiry of three months of the application for a rebate.2. Entitlement to rebate and payment of interest on the rebate amount.3. Rejection of application for payment of interest by the authority.Analysis:1. The Revenue contended that the learned Commissioner (Appeals) erred in granting interest to the respondent from the date of the expiry of three months of the application for a rebate. They argued that the respondent was entitled to the rebate only after the controversy was resolved by the Commissioner. The respondent, however, claimed that their applications for rebate were filed on specific dates and were rejected, leading them to appeal before the Commissioner. The Commissioner allowed the respondent's prayer, and the rebate was granted accordingly. The respondent then sought interest on the rebate amount, which was rejected by the authority. The Commissioner (Appeals) later allowed the appeal of the respondent, leading to the current appeal by the Revenue.2. The respondent's claim for rebate for different amounts was pending from specific dates, and they succeeded before the Commissioner (Appeals) on their claim. The entitlement to interest arose under section 11BB of the Central Excise Act, 1944, as the respondent's application was not entertained within three months of the respective dates. The law mandates that interest is payable on any rebate or refund claim if not paid within three months of the application.3. Considering the factual position and the legal provisions, the Tribunal referred to a previous decision in the case of Jayanta Glass Industries Pvt. Ltd. Vs Commissioner of Central Excise, Kolkata-III, where it was established that interest is payable under section 11BB of the Central Excise Act, 1944. Consequently, the Tribunal dismissed the Revenue's appeal based on the law and precedents.This judgment highlights the importance of timely processing rebate claims and the obligation to pay interest if such claims are not settled within the stipulated period. The decision reinforces the statutory provisions and previous judicial interpretations regarding the payment of interest on delayed rebate amounts, ultimately leading to the dismissal of the Revenue's appeal in this case.