Case Law Details
C.C.E. & S.T.-Ahmedabad Vs Raajratna Metal Industries Ltd (CESTAT Ahmedabad)
Introduction: This article discusses the CESTAT Ahmedabad’s ruling in the case of C.C.E. & S.T.-Ahmedabad vs. Raajratna Metal Industries Ltd. The appeal pertains to the eligibility of interest on a refund sanctioned by the department. We will analyze the arguments presented by both parties and the impact of the court’s decision on the interest period.
Analysis: The dispute revolves around whether the provisions of Sections 11B and 11BB of the Central Excise Act apply to the refund of accumulated Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004. The department contended that these provisions only apply to duty refunds, not Cenvat Credit refunds. However, the respondent cited several judicial precedents, including decisions by the Gujarat and Madras High Courts and the Hon’ble Apex Court, supporting the applicability of Sections 11B and 11BB to Cenvat Credit refunds.
The court upheld the settled position that the respondent is entitled to interest on the refund. The eligibility was confirmed by a retrospective amendment in Rule 16 of the Central Excise Rules, 2002, which made the wire drawing units eligible for Cenvat Credit. The court also rejected the revenue’s argument of continuous litigation as the grounds for keeping the refund pending, emphasizing that the retrospective amendment resolved the matter.
The court ruled that the respondent is entitled to interest from three months after the date of the retrospective amendment (13.07.2006) until the refund’s sanction (14.06.2012).
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