Order Date – 20 February 2024

Parties: M/s AAR Bee Industries Vs The Commissioner of Central Excise, Jammu

Facts –

• The Appellant, M/s AAR Bee Industries, have set up units in Jammu and have claimed the benefit of Notification No.50/2003. Initially the refund of Excise Duty was sanctioned and refund of Education Cess was however rejected.
• The appellant pursued claim of refund of Education Cess with the lower authorities who have granted the refund but rejected the interest on the basis that the refund claimed was on account of pre-deposit whereas the principal amount was reversed by the appellant.

Issue –

• Whether the appellant is entitled to interest on refund of Excise Duty?

Order –

• The Tribunal observed that if the Department is barred from raising demands for the refunds already granted, the appellants also cannot seek interest on the refunds already granted. Further CBEC clarified vide Circular No.682/73/2002-CX dated 19.11.2002 that the provisions of Section 11B of the Central Excise Act, 1944 are not applicable in the case of Exemption Notifications No.56/2002 and No. 57/2002 both dated 14.11.2002.
• The Tribunal was in agreement with the findings of the learned Commissioner (Appeals) that the mechanism of refund has been put in place in order to operationalize the exemption contained in the notifications and to the extent, refunds arising out of these notifications cannot be considered to be refunds under Section 11B of the Central Excise Act, 1944. For this reason also it was found that the appellants have not made out any case for grant of interest.
• Accordingly, the appeals are rejected.