2009 (12) TMI 1029 - HC - Central Excise

Summary

Issues involved: Appeal against disallowance of interest on delayed payment of rebate claims u/s 11BB of Central Excise Act, 1944.

Factual Matrix and Appeal Process:
The petitioner, a pharmaceutical company, filed a writ petition appealing the disallowance of interest on delayed payment of rebate claims by the Ministry of Finance. The initial denial of rebate claims by the Assistant Commissioner of Central Excise, Ujjain, was overturned by the Ld. Commissioner (Appeals-II), Central Excise, Indore. Subsequently, the petitioner claimed interest on delayed payment, which was rejected by the Assistant Commissioner, but allowed by the Ld. Commissioner (Appeals-I). The Revenue appealed this decision to the Customs, Excise & Service Tax Appellate Tribunal, which dismissed the appeal for lack of jurisdiction. The matter was then taken up by the Ministry of Finance, which set aside the Ld. Commissioner's order and disallowed the interest claim.

Interpretation of Section 11BB:
The key question was whether the petitioner was entitled to interest on delayed payment of rebate claims u/s 11BB of the Act. The Supreme Court's interpretation clarified that interest is payable only after three months from the date of the refund application, not from the date of deposit. The Court rejected the petitioner's argument for equitable interest, citing the specific statutory provision. The Court referred to previous judgments emphasizing that interest can only be awarded based on statutory provisions, agreements, or equitable considerations with a mandatory written demand.

Conclusion:
The Court, bound by the Supreme Court's interpretation of Section 11BB, found no merit in the petitioner's claim for interest on delayed payment of rebate claims and dismissed the writ petition. No costs were awarded in this matter.