The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) allowed the refund claim filed after the expiry of 3 months along with interest u/s 11BB of Central Excise Act,1994.
The central excise officers found that the Appellant had wrongly availed the exemption Notification No. 214/86 CE dated. 25.03.1986 and Appellant were required to pay duty amounting to Rs. 77,99,763/- and Rs.19,25,540/- . Accordingly, the appellant deposited the amount of Rs. 35,00,000/- and of Rs. 15,00,000/- and credited the same in the PLA account for payment of duty. To ascertaina sufficient balance in the Cenvat account,the duty amount was debited from the cenvat account.
The appellant claimed a refund for the amount of Rs. 35,00,000/- and Rs. 15,00,000/- deposited in their PLA account lying unutilized due to inverted duty structure which was rejected by the Jurisdictional authority. Commissioner (Appeals) on appeal upheld the impugned order against which the appellant filed an appeal before the CESTAT and the tribunal set aside the impugned orders by allowing the refund of the unutilized balance in PLA. On the appellant’s request to sanction the refund claims of Rs.35,00,000/- & 15,00,000/- along with interest, the Adjudicating authority sanctioned both the refund claims without interest.
The appellant contended that as per CBEC has issued Circular No. 130/41/95-CX the department is liable for payment of interest on various types of refund claims not processed within 3 months from the date of receipt of refund claim. The instructions in said circular for payment of interest on delayed sanction of refund claims also coverthe refund of PLA balance.
The Tribunal observed that if the refund was granted after the expiry of the period of three months from the date of receipt of the application, then interest would also be payable on the amount of refund granted, from the date immediately after the expiry of three months from the date of receipt of the application, till the date of refund.
Judicial member Mr Ramesh Nairset aside the impugned order and appeals filed by the appellant are allowed with consequential relief.
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