2018 (1) TMI 1565 - HC - Central Excise

Interest on delayed refund of excise duty - Section 11B of the Central Excise Act - HELD THAT - Admittedly the question of payment of interest on the delayed refund of Excise duty has already been settled by a Division Bench of this Court in AMALGAMATED PLANTATIONS (P) LTD. VERSUS UNION OF INDIA 2013 (11) TMI 589 - GAUHATI HIGH COURT - The Division Bench has held that Section 11B of the Central Excise Act does not exclude claim of refund made in terms of the Notification dated 8-7-1999 and therefore the assessee is entitled to interest under Section 11BB of the Central Excise Act on the excise duty refunded to them. The Excise Officer are directed to determine the interest amount payable to the petitioner for the relevant period within 3 months from today - petition is allowed with cost of 1000/- payable to the petitioner.

Summary

Issues involved:
1. Claim for interest on delayed refund of excise duty
2. Interpretation of Section 11B of the Central Excise Act
3. Precedent set by a Division Bench regarding interest on excise duty refunds

Analysis:

1. Claim for Interest on Delayed Refund of Excise Duty:
The petitioner sought to quash an order rejecting their claim for interest on a delayed refund of excise duty. The petitioner, a registered company manufacturing PanMasala, had its excise duty refund sanctioned but was denied interest on the delayed refund by the Respondent. The petitioner challenged this denial through the present petition.

2. Interpretation of Section 11B of the Central Excise Act:
The Respondent's rejection of the interest claim was based on the argument that refund did not fall within the purview of Section 11B of the Central Excise Act. However, the Court referred to a previous judgment by a Division Bench in Amalgamated Plantations (P) Ltd. v. Union of India. The Division Bench had concluded that Section 11B does not exclude claims for refund as per a specific notification, thereby entitling the assessee to interest under Section 11BB of the Central Excise Act on the refunded excise duty. In light of this interpretation, the Court directed the Excise Officer to determine the interest amount payable to the petitioner within three months and quashed the impugned order of the Assistant Commissioner, Central Excise.

3. Precedent Set by a Division Bench Regarding Interest on Excise Duty Refunds:
The judgment in Amalgamated Plantations (P) Ltd. v. Union of India established a precedent that claims for refund in accordance with a particular notification are eligible for interest under Section 11BB of the Central Excise Act. By citing this precedent, the Court not only ruled in favor of the petitioner but also highlighted the binding nature of the Division Bench's interpretation. Additionally, the Court allowed the petition with costs payable to the petitioner, emphasizing the validity of the claim for interest on the delayed refund of excise duty.

This comprehensive analysis of the judgment showcases the legal intricacies involved in determining the entitlement to interest on delayed excise duty refunds and the significance of precedent in shaping such decisions.