COMMISSIONER OF CENTRAL EXCISE Vs. RELIANCE INDUSTRIES LTD

JUDGEMENT

(1.) In each of these appeals under Section 35-G of the Central Excise Act, 1944 (the Act), the Appellant-revenue has challenged common order dated 15th July, 2008 made by the Customs Excise and Service Tax Appellate Tribunal (the Tribunal) proposing following question:

(2.) The Respondent is engaged in the manufacture of Polyester Texturised Yarn and was availing CENVAT credit of the duty paid on inputs used in the manufacture of Polyester Texturised Yarn. During the period April 2003 to September 2005, the Respondent cleared various consignments of Polyester Texturised Yarn for export under bond. In view of such exports, the Respondent was neither able to utilize the CENVAT credit of duty paid on the inputs used in the manufacture of Polyester Texturised Yarn so exported, nor was able to adjust such credit towards payment of duty on the final products cleared for home consumption. The Respondent, therefore, filed various refund claims under Rule 5 of the CENVAT Credit Rules, 2002/2004 (the Rules) claiming refund of the CENVAT credit of duty paid on inputs used in the manufacture of Polyester Texturised Yarn which was exported under bond. The refund claims made by the Respondent came to be sanctioned under the provisions of Rule 5 of the Rules read with Notification No. 11/2002 C.E. (N.T.) dated 1-3-2002 as amended by Notification No. 49/2003 C.E. (N.T.), dated 17th May, 2003, vide various orders passed by the Adjudicating Authority. However, the refunds so sanctioned were paid after the expiry of a period of three months from the date of making the refund applications. The Respondent, therefore, filed applications claiming interest on delayed sanctioning of the refund in terms of Section 11BB of the Act which came to be rejected by the Adjudicating Authority. The Respondent challenged the orders made by the Adjudicating Authority by preferring appeals before the Commissioner (Appeals), who dismissed the appeals and confirmed the orders made by the Adjudicating Authority. Against the orders made by Commissioner (Appeals), the Assessee preferred second appeals before the Tribunal who vide common order dated 15th July, 2008 allowed all the appeals.

(3.) Assailing the impugned order of the Tribunal, Ms. Amee Yajnik learned Senior. Standing Counsel for the Appellant submitted that the refund claim filed by the Assessee had been sanctioned under Rule 5 of the Rules read with Notification No. 11/2002-C.E. (N.T.), dated 1-3-2002 as amended by Notification No. 49/2003-C.E. (N.T.), dated 17th May, 2003. That, under the CENVAT Credit Rules, 2002/2004 as well as the aforesaid notification, there is no provision for payment of interest on delayed sanction of refund of accumulated CENVAT Credit. That even otherwise, this is not a case where duty was deposited with the exchequer and refunded at a later stage. The refund was granted towards accumulated CENVAT Credit on account of exports and where the Assessee was not able to utilize the same for clearance of goods on payment of duty for home consumption. The credit was all along lying with the Respondent who was always free to utilize the same. Therefore, there cannot be any provision under the statute for payment of interest on the amount which was never deposited with the exchequer.