2019 (10) TMI 1412 - AT - Central Excise

Interest on delayed refund - actual date of filing of the refund application by the appellant - Section 11BB of the Central Excise Act, 1944 - HELD THAT - From the available records and the detailed date chart furnished by the appellant at page 8 11 of the appeal paper book It is found that the refund application was filed by the appellant on 13.06.2005. The said refund application was decided by the Asst. Commissioner vide his order dt.21.06.2009 as stated under para 2 of the impugned order dt.20.02.2018 under which the refund was sanctioned but was credited to the Consumer Welfare Fund on the ground of unjust enrichment. The unjust enrichment aspect relating to the said refund application dt.13.06.2005 after several rounds of litigation was resolved by the Commissioner (Appeals) vide the Order-in-Appeal dt.22.02.2016. Therefore it is not correct to say that the refund application was filed by appellant on 22.07.2016 basing on the Order-in- Appeal dt.22.02.2016. The position of law in this regard has been well settled by the Hon ble Supreme Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. 2011 (10) TMI 16 - SUPREME COURT wherein it was held that Sec.11BB of the Central Excise Act lays down that in case any duty paid is found refundable and if the duty is not refunded within the period of 3 months from the date of receipt of the application submitted under Sub-Sec.(1) of Sec.11B of the Act then the applicant shall be paid interest at such rate as may be fixed by the Central Government on expiry of a period of 3 months from the date of receipt of the application. Thus the refund application was filed by the appellant on 13.06.2005 and the refund was finally paid on 15.09.2016 and in terms of Sec.11BB of the Central Excise Act the appellant is entitled to the interest at the rate as notified by the Central Government - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of payment of interest under Sec.11BB of the Central Excise Act,1944.

Analysis:
The appellant, a company formerly known as Gulf Oil Corporation Ltd., filed a refund claim under Sec.11B of the Central Excise Act,1944, seeking a refund of excise duty paid on quality control samples from 1986-87 to 2004-05. The refund was initially credited to the Consumer Welfare Fund due to unjust enrichment concerns. After multiple litigations, the refund was sanctioned and disbursed to the appellant. Subsequently, the appellant requested the release of interest amounting to ?10,65,233.00 under Sec.11BB of the Act. However, the request was denied by the Asst. Commissioner, stating that the refund was sanctioned within the stipulated period of three months from the application date, hence no interest was payable.

Upon appeal, the Commissioner (Appeals) upheld the denial of interest payment, leading to the appellant's appeal before the Tribunal. The crucial issue revolved around determining the actual date of the refund application. The Commissioner's findings were contradictory, mentioning different dates of application submission. The appellant argued that the application was filed in 2005, not in 2016 as claimed by the authorities, supported by a detailed date chart.

The Tribunal analyzed the facts and legal precedents, including the Supreme Court judgments in similar cases. Referring to the case law, it was established that interest under Sec.11BB is payable if the refund is not granted within three months of the application. The Court emphasized the importance of timely communication of deficiencies in refund applications by the Revenue. Based on the settled legal position, the Tribunal concluded that the appellant filed the refund application in 2005 and was entitled to interest as per the Act.

Therefore, the Tribunal allowed the appeal, holding that the appellant is entitled to interest as notified by the Central Government under Sec.11BB of the Central Excise Act,1944. The decision was made in favor of the appellant, granting consequential relief.

This detailed analysis highlights the legal journey of the appellant's refund claim, addressing the denial of interest payment and the subsequent appeal leading to a favorable outcome before the Tribunal.