2013 (9) TMI 849 - HC - Central Excise

Interest on delayed amount - Refund claim - delay in granting refund of more than 9 years - Held that - chart shows that different rates of interest were prescribed by the Central Government from time to time. Copy of the said chart was handed over to respondents who could not dispute it. We, therefore, hold that in view of Section 11BB, the petitioner is entitled to get interest for the delayed refund amount - Two months time is allowed to the respondents to calculate and pay the interest on the refunded amount to the petitioner. The petitioner will be entitled for interest for the period 10th February, 2001 (which is three months from the date of application) to 20th August, 2010, the date on which the amount was refund - Decided in favor of assessee.

Summary

Issues: Liability of respondents to pay interest under Central Excise Act, 1944 on refund amount.

The judgment pertains to a writ petition filed regarding the liability of the respondents to pay interest under the Central Excise Act, 1944 on a refund amount. The petitioner had deposited a sum of Rs.2.25 lacs as per the order of the CEGAT, which was later quashed, making the amount refundable. The petitioner filed for a refund, which was delayed until 2010, prompting the petition due to non-payment of interest on the refunded amount.

The petitioner claimed entitlement to interest under Section 11-BB of the Central Excise Act, citing rates notified by the Central Government during the relevant period. The respondents argued that the petitioner should pursue the statutory remedy of appeal instead. The court noted that the facts were undisputed, the appeal had been allowed, and the only dispute was regarding the liability to pay interest on the refunded amount.

The court analyzed Section 11BB, which mandates interest on refund amounts from three months after the refund application until the actual refund, without exceptions. The delay in refund was attributed to the department, causing harassment to the petitioner. The court also highlighted the fault on the department's end as per the counter affidavit, further supporting the petitioner's claim for interest under Section 11BB.

The petitioner presented a chart showing varying interest rates prescribed by the Central Government over time. The court accepted this chart as evidence, concluding that the petitioner was indeed entitled to interest for the delayed refund amount. Consequently, the writ petition was allowed, holding the respondents liable to pay interest as per the prescribed rates. The respondents were given two months to calculate and pay the interest from the specified period to the petitioner. No costs were awarded in the matter.