TaxTMI 
TaxTMI 
2021 (1) TMI 1024
X X X X Extracts X X X X
X X X X Extracts X X X X
....al authority to demand interest on the modvat credit availed by the respondents. 2. The brief facts of the case are that the respondent is engaged in manufacture of Dry Cell Batteries. They were using wooden crates for packing their consignment of finished goods. The charges incurred by the appellant for packing the consignment in wooden crates were not included in the assessable value. Department issued show cause notice as to why the said expenditure on wooden crates should not be included in the assessable value for assessment of the finished product. Vide order dt.22.02.1985, the then jurisdictional Asst. Collector passed order holding that said cost has to be included in the assessable value. The matter reached the Tribunal. The Tri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e demand of interest on the ineligible credit under Section 11AB was set aside. The Commissioner (Appeals) also held that the respondent is eligible for interest under Section 11BB of Central Excise Act, 1944 from three months from the date of filing of refund claim (05.11.2007) till the refund is paid to the respondent. The department is now before the Tribunal against such order passed by the Commissioner (Appeals). 2.1 Ld. A.R, Ms. T. Ushadevi appeared and argued for the department. She submitted that the Commissioner (Appeals) while deciding the case had considered two issues - (a) whether the assessee has to pay interest on the irregular modvat credit availed by them (b) whether interest is payable from expiry of three months from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce. 2.2 With regard to the second issue of payment of interest to the respondent on the refund amount, it is countered by the Ld.A.R stating that there was much delay caused by the respondent in furnishing the details to the department. Though the refund claim was filed on 05.11.2007 and the department called for details of credit availed by the respondent vide letter dt. 30.4.2008, the respondents have submitted the worksheet of credit only on 16.01.2009. The Order-in-Original was passed on 29.07.2009. Since the delay is caused by the respondent themselves, the department is not liable to pay interest on the amount of refund sanctioned to the respondent. 3.1 On behalf of the respondent, Ld. Counsel Shri D. Santhanagopalan appeared a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....owever, the original authority had also demanded interest on the alleged ineligible credit availed by them. So also, no interest was granted on the amount refunded to the respondent. For these reasons, the respondents filed appeal before Commissioner (Appeals), who upheld the sanction of refund of Rs. 29,41,926/- as well as appropriation of modvat credit. The demand of interest made by the department on alleged modvat credit has been correctly set aside by the Commissioner (Appeals). Ld. Counsel referred to Rule 57I of Central Excise Rules, 1944 which is applicable to the period pertaining to this appeal. It is argued by the Ld. Counsel that as per this provision, interest is payable only after the expiry of three months from the date of re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en that the liability to pay interest will start only after expiry of three months from the date of receipt of demand notice. Since the amount has been appropriated at the time of order of refund itself, as correctly pointed out by counsel for respondent there is no liability to pay interest. We hold that the finding rendered by the Commissioner (Appeals) in this regard is legal and proper. 6. The next issue raised by the Ld.A.R is that the department is not liable to pay interest on the sanctioned amount of Rs. 29,41,926/-. The Ld. Counsel for respondent has submitted that they have already received the sanctioned refund. As per Section 11BB of Central Excise Act, 1944, the assessee is eligible for interest on the amount from three mont....