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Issues: (i) Whether the refund claims for unutilised Cenvat credit were barred by limitation under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (N.T.) dated 18.06.2012; and (ii) whether interest was payable on the delayed refund of accumulated Cenvat credit under Section 11BB of the Central Excise Act, 1944.
Issue (i): Whether the refund claims for unutilised Cenvat credit were barred by limitation under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (N.T.) dated 18.06.2012.
Analysis: The period of limitation for refund under Rule 5, as applied through the notification, is computed with reference to the relevant date at the end of the quarter for which the claim is filed. The claims in question were filed within one year from the last date of the relevant quarter. The rejection on the ground of limitation was therefore inconsistent with the governing legal position.
Conclusion: The refund claims were not time-barred and the limitation-based rejection was unsustainable, in favour of the assessee.
Issue (ii): Whether interest was payable on the delayed refund of accumulated Cenvat credit under Section 11BB of the Central Excise Act, 1944.
Analysis: Interest follows from delay in sanctioning refund after the statutory period of three months from receipt of the refund application. The fact that the refund was processed only after remand did not displace the original filing date where the claims had already been made and the supporting documents were treated as part of the original claim for adjudicatory purposes. Accordingly, delay beyond three months from filing attracted interest.
Conclusion: Interest under Section 11BB of the Central Excise Act, 1944 was payable on the delayed refund, in favour of the assessee.
Final Conclusion: The impugned orders were modified, the limitation-based rejection was set aside, and the assessee was held entitled to refund relief and statutory interest on the delayed refund.
Ratio Decidendi: For refund of accumulated Cenvat credit under Rule 5 read with the governing notification, limitation is computed from the end of the relevant quarter, and interest under Section 11BB becomes payable if refund is not granted within three months from the date of the refund application.
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