2019 (3) TMI 1694 - HC - Central Excise

Interest on the delayed refund of central excise duty - Section 11 BB of Central Excise Act 1944 - HELD THAT - Issue decided in the case of AMALGAMATED PLANTATIONS (P) LTD. VERSUS UNION OF INDIA 2013 (11) TMI 589 - GAUHATI HIGH COURT where it was held that section 11B of the Central Excise Act 1944 does not exclude claim of refund made in terms of the notification dated 08-07-1999. Petitioners would therefore be entitled to interest under section 11BB of the Central Excise Act 1944 on the excise duty refunded to them. The petitioner would be entitled to interest under Section 11BB of the Central Excise Act 1944 on the excise duty refunded to it belatedly. Respondent No.3 shall now determine the interest amount payable to the petitioner for the relevant periods where after the same shall be released to the petitioner within a period of 3 months from today. Petition allowed - decided in favor of petitioner.

Summary

Issues:
- Delayed refund of central excise duty and entitlement to interest under Section 11BB of the Central Excise Act, 1944.

Analysis:

Issue 1: Delayed Refund of Central Excise Duty
The petitioner, an industrial unit in Assam, sought a direction for interest on delayed refund of excise duty under Section 11BB of the Central Excise Act, 1944. The excise duty was levied on the petitioner despite claiming exemption under government notifications. Following a court order, the duty was refunded in 2018 for the periods in question.

Issue 2: Entitlement to Interest under Section 11BB
Section 11BB mandates interest payment if duty refunded under Section 11B is delayed beyond three months from the application date. The court referred to a Division Bench judgment that emphasized the clear language of the Act, stating that any excise duty refund must be paid within three months, with no exceptions. The judgment highlighted the strict construction of fiscal legislation and the automatic applicability of interest provisions for delayed refunds beyond three months.

Judicial Precedents and Conclusion
The court cited the case of Ranbaxy Laboratories Ltd. v. Union of India and a Single Bench decision involving Hindustan Coca-Cola Beverages Pvt. Ltd. to support the interpretation that excise duty refunds, even under specific notifications, are entitled to interest under Section 11BB. Consequently, the court held that the petitioner was entitled to interest on the belatedly refunded excise duty. The respondent was directed to determine the interest amount for the relevant periods and release it to the petitioner within three months. The writ petition was disposed of in favor of the petitioner.