2019 (4) TMI 425 - AT - Central Excise

Entitlement to Interest on Refund Claims Under Central Excise Act

The Tribunal held that the appellant, a 100% EOU, was entitled to interest under Section 11BB of the Central Excise Act on a refund claim. Despite initial ... 100% EOU - Interest on delayed refund - Section 11 BB of the Central Excise Act - debonding of unit - Held that:- The ld. Commissioner (Appeals) has erred in rejecting the claim of interest, observing that the some new documents were filed and examined pursuant to the remand by this Tribunal. It is evident from the record that on the very same documents, which the appellants had filed on the date of filing the refund claim i.e. (17.04.2009), the refund claim was found to be admissible and allowed. The appellant is entitled to interest as per Rules as provided under Section 11 BB of the Act for the period from 18.07.2009 to till date of sanction of refund - Appeal allowed - decided in favor of appellant. Issues:Claim of interest on refund under Section 11 BB of the Central Excise Act.Analysis:Issue 1: Claim of interest on refund under Section 11 BB of the Central Excise Act.The appellant, a 100% EOU, deposited excise duty for debonding and subsequently exported the goods. The refund claim was rejected initially due to non-registration under Central Excise Rules and lack of proper procedure. The Tribunal remanded the matter, noting substantial evidence of export and lack of proper examination by Revenue. Upon verification, the Range Superintendent confirmed the export and recommended the refund. The Asstt. Commissioner sanctioned the refund but omitted interest under Section 11BB. The appellant's claim for interest was rejected citing the refund was granted post verification. The Tribunal found no new evidence submitted post-remand and held the appellant entitled to interest from the due date till refund sanction, directing its payment within 45 days.This judgment clarifies the entitlement to interest on refunds under Section 11BB of the Central Excise Act, emphasizing that interest accrues from the due date of the refund till its sanction. It highlights the importance of maintaining proper documentation and procedural compliance for refund claims, ensuring thorough examination of evidence by authorities, and upholding principles of natural justice in determining refund entitlements.