Appellants are entitled to 12% interest on delayed rebate claims per Section 11BB of the Central Excise Act, 1944 due to inordinate delay.

The Appellant has filed the present appeal against Order-in-Appeal No.NOI-EXCUS-002-APP-38-2022-23 dated 04.05.2022 passed by the Commissioner (Appeals), Customs, CGST & Central Excise, Noida.

2. The facts of the present case in brief are that the Appellant was registered as Central Excise assessee vide registration No.AAACH7447KXM001 and was engaged in the manufacture of various mentha products which were exported by them. The Appellant used to procure raw materials from the local market as well as from manufacturers located in the State of Jammu and Kashmir, who were availing benefit of Notification No.56/2002- CE dated 14.11.2002. This Notification provided the benefit of refund of duty paid by the manufacturers located in the State of Jammu and Kashmir to such manufacturers, but materials supplied by them were treated as duty paid goods. The Appellant availed Cenvat Credit of duty paid on raw materials and used such credit for payment of duty on goods exported subsequently. The Appellant used to file rebate claim for refund of duty paid on goods exported. The Appellant filed 67 rebate claims for the period 2008-09 and 2009-10 claiming rebate of Rs.2,40,08,101/-. The rebate claims were kept pending in view of the fact that an investigation was initiated by the Central Excise Commissionerate, Meerut on the ground that the Appellant was not receiving any goods from the manufacturers based in the State of Jammu and Kashmir but only invoices were procured for availment of CENVAT credit. However, the Department rejected rebate claims in 34 cases out of 67, on the ground that the Appellant availed inadmissible Cenvat credit without receipt of goods. In remaining 33 cases, involving rebate of Rs.1,29,43,690/-, a Show Cause Notice, SCN was issued on 07.09.2010 for rejection on the ground on which rebate claim in 34 cases was already rejected.

3. Being aggrieved with the above rejection order of rebate claims, the Appellant filed an appeal before the Commissioner (Appeals), Meerut-II who vide Order-in-Appeal dated 30.10.2019 allowed the appeal and directed to quantify and verify the amounts in each claim with reference to documents. The Department filed revision application against the said order before the Revisionary Authority. Meanwhile, the Department issued four SCNs covering the period from 2003-04 to June 2009 for rejection of Cenvat credit availed by the Appellant in respect of invoices received from the manufacturers of Jammu and Kashmir. In the matter of revision application filed by the Department, ‘Revisionary Authority’ vide order dated 13.06.2011 set aside the Order-in-Appeal dated 30.10.2009 and remanded the case to the Original Authority for re-adjudication in view of the outcome of the ongoing adjudication proceedings in the cases of denial of CENVAT credit. The said four SCNs issued to the Appellant were assigned to the common adjudicator namely Commissioner, Central Excise, Chandigarh for adjudication but no action was taken even after lapse of 12 years from the date of the first SCN. So, the Appellant filed writ petition before the Hon’ble High Court of Punjab and Haryana against action of keeping SCNs pending for such a long period. The Hon’ble Court ordered to quash all SCNs vide judgment dated 22.01.2021. Subsequent to the above judgement, rebate claim amounting to Rs.2,38,88,596/- in respect of 66 claims were sanctioned vide Order dated 06.10.2021. One rebate claim for Rs.1,19,505/- was not found to be in order, hence, not considered for sanction. However, no interest was paid for the delay of 12 years while sanctioning of the rebate claim.

4. The Appellant being aggrieved with the above order, filed an appeal before the Commissioner (Appeals) Noida, who held that interest on the above amount should be granted in accordance