2010 (8) TMI 814 - AT - Central Excise

Summary

Issues:
Appeal against denial of interest on delayed refund.

Analysis:
1. The case involved the appellants filing a refund claim in 1990, which was initially rejected by the Assistant Commissioner but later allowed by the Commissioner (Appeals) in 1999. Despite the finality of this order, subsequent rejections and appeals followed, leading to multiple Tribunal orders in favor of the appellants.

2. The central issue revolved around the denial of interest on delayed refund by the lower authorities. The appellants argued that Section 11BB of the Central Excise Act, 1944 entitled them to interest on the delayed refund, as the refund claim was not honored within three months of the final order in 1999. The department contended that since the refund was issued within three months of the latest Tribunal order in 2008, no interest was due.

3. The Tribunal analyzed Section 11BB, which mandates interest payment if duty refund is delayed beyond three months from the application date. The explanation under Section 11BB establishes a deeming fiction for orders made by higher authorities, ensuring interest payment if refunds are not processed within the stipulated time frame.

4. Considering the facts and legal provisions, the Tribunal held that the appellants were indeed entitled to interest on the delayed refund from three months after the final order in 1999. The Tribunal emphasized that the repeated rejections by lower authorities, despite Tribunal directives, did not absolve the department from paying interest as per the law.

5. The Tribunal referenced relevant case laws such as Commissioner of Central Excise, Pune-III v. Ballarpur Industries Ltd., Swaraj Mazda Ltd. v. UOI, and UOI v. Shreeji Colour Chem Industries to support the appellants' entitlement to interest on delayed refunds.

6. Ultimately, the Tribunal ruled in favor of the appellants, granting them interest on the delayed refund from three months after the final order in 1999. The appeal was disposed of accordingly, highlighting the importance of adhering to legal provisions for timely refund processing and interest payment.