High Court grants appellant refund under Cenvat Credit Rules & orders interest payment.

The High Court allowed the appeal in favor of the appellant, holding that the appellant was entitled to a refund under Rule 5 of the Cenvat Credit Rules for the specified amount. The Court also directed the payment of interest on the refund amount in accordance with Section 11BB of the Central Excise Act, 1944. The Court ordered the concerned authority to calculate and pay the interest amount to the appellant within eight weeks. Each party was directed to bear their own costs.

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Issues:
Claim for refund under Rule 5 of Cenvat Credit Rules read with Notification dated 18.06.2012 and Section 11B of the Central Excise Act, 1944.

Detailed Analysis:

1. Claim for Refund Under Rule 5 of Cenvat Credit Rules:
The appellant filed a refund claim under Rule 5 of the Cenvat Credit Rules for duty paid on inputs used in the manufacture of finished goods cleared under International Competitive Bidding (ICB) during a specific period. The claim was rejected by the Assistant Commissioner, Commissioner (Appeals), and the Customs, Excise and Service Tax Appellate Tribunal. The appellant contended that clearances under ICB should be considered as exports, entitling them to claim a refund. The Tribunal had previously upheld a similar claim by the appellant for a different period. The High Court agreed with the appellant, stating that the appellant was entitled to a refund under Rule 5 of the Rules, as the claim was disallowed contrary to law.

2. Entitlement to Interest on Refund Amount:
The appellant raised the issue of entitlement to interest on the refund amount under Section 11BB of the Central Excise Act, 1944. The appellant argued that interest should be paid on the refund amount as per the provisions of the Act. The respondent contested this, stating that since the claim was initially found inadmissible, there was no basis for awarding interest. However, the Court referred to previous judgments and held that the appellant was entitled to interest on the refund amount. The Court clarified that interest under Section 11BB commences from the expiry of three months from the date of the refund application until the payment of the refund. The Court directed the concerned authority to calculate and pay the interest amount to the appellant within eight weeks.

3. Final Order:
The High Court set aside the order of the Customs, Excise and Service Tax Appellate Tribunal, allowing the appeal in favor of the appellant. The Court held that the appellant was entitled to a refund under Rule 5 of the Cenvat Credit Rules for the specified amount. Additionally, the Court directed the payment of interest on the refund amount in accordance with Section 11BB of the Act. The Court ordered the calculation and payment of the interest amount by the concerned authority within eight weeks from the date of the judgment. The appeal was allowed, and each party was directed to bear their own costs.

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