2009 (1) TMI 696 - AT - Central Excise

Summary

Issues:
- Appeal against order-in-appeal granting interest on delayed payment of refund.

Analysis:
The appeal was filed by the Revenue challenging the order-in-appeal passed by the CCE (Appeals), Indore, which held that the respondents were entitled to interest on delayed payment of refund from 26-8-1995. The main contention was regarding the applicability of Section 11BB of the Central Excise Act, 1944, which governs interest on delayed refunds. The respondent's counsel argued that interest for delay in payment is payable from the date immediately after the expiry of 3 months from the date of filing the refund application, as per Section 11BB. The Commissioner (Appeals) had allowed interest for the delay period from 26-8-1995, citing the provisions of Section 11BB.

Upon considering the submissions from both sides, it was noted that the refund applications were filed between February 1990 and April 1993, before the insertion of Section 11BB on 26-5-1995. The refund was sanctioned in 2004, well after the 3-month period from the filing dates. Section 11BB, which deals with interest on delayed refunds, specifies that if duty ordered to be refunded is not refunded within three months from the date of application, interest is payable at a rate fixed by the Central Government. In this case, interest under Section 11BB became due from 26-8-1995, as per the statutory provisions.

The Tribunal found no infirmity in the impugned order and dismissed the Revenue's appeal, affirming that the appellant was entitled to interest for the delay in refund sanction from 26-8-1995. The judgment was delivered on 2-1-2009 by the Tribunal.