Custom, Excise & Service Tax Tribunal
Zenith Fibres Limited vs C.C.E.& Cus., Vadodara on 22 May, 2017
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, O-20, NMH Compound Ahmedabad Central Excise Appeal No.1806 of 2010-SM Arising out of the Order-in-Appeal No.Commr(A)/201/VDR I/2010 dated 30.8.2010 passed by the Commissioner (Appeals), Central Excise & Customs, Vadodara. Zenith Fibres Limited .. Appellant Vs. C.C.E.& Cus., Vadodara .. Respondent
Appearance:
Present Shri H. Ganguly, Advocate, for the appellant Present Shri L. Patra, A.R. for the Respondent-Revenue Coram: Honble Dr. D.M. Misra, Member (Judicial) Date of hearing/decision: 22.5.2017 Final Order No. A/11215/2017 Per Dr. D.M. Misra:
Heard both sides. This appeal is filed against the Order-in-Original No. Commr(A)/201/VDR I/2010 dated 30.8.2010 passed by the Commissioner(Appeals), Central Excise & Customs, Vadodara.
2. Briefly stated the facts of the case are that the appellant have filed five quarterly refund claims for the period from April 2006 to September 2007 amounting to Rs.70,21,422/- under Rule 5 of CENVAT Credit Rules, 2004. An amount of Rs.15,82,442/- was sanctioned within time but Rs.54,38,980/- was sanctioned with much delay i.e. on 27.3.2009. The appellant claimed interest on the delayed sanctioned amount of Rs.54,38,980/- under Section 11BB of the CEA, 1944. The said claim for interest was rejected. Aggrieved by the said order, they filed appeal before the ld. Commissioner (Appeals), who in turn, also rejected their appeal. Hence, the present appeal.
3. Ld. Advocate for the appellant submits that even though the said quarterly refund claim was filed within time, the amount of Rs.54,38,980/- was sanctioned three months after filing of the refund claim. It is his contention that thus they are entitled to interest under Section 11BB of the CEA, 1944 in view of the judgment of the Honble Gujarat High Court in the case of C.C.E. vs. Reliance Industries Limited 2010 (259) ELT 356 (Guj.); Honble Bombay High Court in the case of Jindal Drugs Pvt. Limited vs. UOI 2016 (342) ELT 17 (Bom.) involving similar facts and circumstances. He has also referred to the judgment of Honble Supreme Court in the case of Ranbaxy Laboratories Limited Vs. UOI 2011 (273) ELT 3 (SC).
5. Ld. A.R. for the Revenue submits that there is no provision to allow interest on the interest amount as claimed by the Appellant. In support, he has referred to the judgment of Larger Bench of the Tribunal in the case of Sun Pharmaceuticals Industries Limited v. C.C.E., Chennai 2005 (185) ELT 253 (Tri-Larger Bench).
6. I find that the main issue for consideration is eligibility of interest u/s 11BB of CEA, 1944 on the cash refund filed under Rule 5 of Central Excise Rules, 2004, which is no more res integra being settled by the judgment of Honble Gujarat High Court in Reliance Industries Limiteds case (supra). Their Lordships observed as under:
11.?There is a basic fallacy in the premise on which the contention of Revenue is based. Cenvat credit is nothing else but credit for duty paid by the supplier of inputs, which are dutiable goods manufactured by the supplier or dutiable services rendered by the service provider. In principle such goods/services when utilised for further manufacture or providing service which are dutiable already carry the duty paid component as a part of its price/value, and hence the duty payable on the ultimately manufactured goods/services rendered stands reduced to the extent of duty already paid on the inputs. Thus the duty paid on inputs by the supplier has already been actually received by the exchequer. Therefore, this contention is, to say the least, misconceived.
12.?On the facts and in the circumstances of the present case, admittedly the refund has been ordered under Rule 5 of the Rules and there was a delay in sanctioning the refund, in the circumstances, the provisions of Section 11BB of the Act would clearly be attracted and as such the Tribunal was justified in holding that the provisions of clause (c) of the proviso to sub-section (2) of Section 11B and consequently Section 11BB of the Act are clearly applicable to the facts of the present case and as such the respondent is entitled to interest on delayed refund of Cenvat Credit as claimed by it.
7. Therefore, the Appellant are eligible to interest on the refund amount of Rs.54,38,980/- from the date of expiry of three months of filing the respective claim. I agree with the contention of the ld. A.R. for the Revenue that interest on the interest amount is not admissible in view of Larger Bench decision in Sun Pharmaceuticals Industries Limiteds case (supra). In the result, the impugned order is modified and the appeal is allowed to the extent mentioned as above. Appeal disposed.
(Dr. D.M. Misra) Member (Judicial scd/ Appeal No.E/1806/2010-SM 1