Tribunal Upholds 6% Interest Rate for Refund Claims

The Tribunal upheld the interest rate of 6% per annum as specified in Notification No. 24/2014, rejecting the appellant's plea for a higher rate based on older notifications and case laws. The decision emphasized the importance of adhering to the current notification in determining the applicable interest rate for refund claims under the Central Excise Act.

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Issues:
Rate of interest applicable on refund claims under Notification No. 67/2003 versus Notification No. 24/2014.

Analysis:
The appellant, engaged in the manufacture of Pan Masala and Chewing tobacco, filed refund claims for March 2015 and April 2015. The appellant's grievance was regarding the rate of interest, seeking it to be fixed at 12% instead of the 6% granted. The appellant relied on case laws like CCE, Hyderabad vs. I T C Ltd., Govind Mills Ltd. vs. CCE, Allahabad, and Dinesh Tobacco Industries vs. Commissioner CGST, Jodhpur to support the claim for a higher interest rate.

The Departmental Representative argued that Notification No. 67/2003 had been superseded by Notification No. 24/2014, which specifically fixed the interest rate at 6% per annum. Therefore, the Department contended that the order under challenge, granting interest at 6%, was lawful and should not be modified. The Departmental Representative requested the appeal to be dismissed.

After considering the arguments from both sides, the Hon'ble Member (Judicial) observed that the Government, through Notification No. 24/2014, had exercised its power under Section 35FF of the Central Excise Act to set the interest rate at 6% per annum. The Member noted that Notification No. 17/2002 had been superseded by Notification No. 24/2014, rendering the appellant's reliance on older notifications and case laws invalid. The Member highlighted that the decisions cited by the appellant were from a period before the issuance of Notification No. 24/2014, and therefore, the rate of interest could not be altered. Concluding that there was no infirmity in the Adjudicating Authority's order, the Member dismissed the appeal, upholding the interest rate of 6% as per the current notification.

In summary, the Tribunal upheld the interest rate of 6% per annum as specified in Notification No. 24/2014, rejecting the appellant's plea for a higher rate based on older notifications and case laws. The decision emphasized the importance of adhering to the current notification in determining the applicable interest rate for refund claims under the Central Excise Act.

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