2016 (8) TMI 124 - HC - Central Excise

Entitlement of writ petitioner to interest under section 11BB of the central excise act 1944 on delayed excise duty refund Held that - language of Section 11B is very clear and unambiguous. The Section does not distinguish or differentiate between any kind of excise duty refund, whether duty paid in excess or duty paid which are exempted. Review sought for on the ground that two Central Government circulars dated 19-12-2002 and 08-12-2006 says section 11B not applicable to in case of exemption notification. Review petition dismissed.

Summary

Issues:
1. Entitlement of interest under Section 11BB of the Central Excise Act, 1944 on delayed excise duty refund.
2. Applicability of Section 11B of the Central Excise Act, 1944 to exemption notifications.

Issue 1: Entitlement of interest under Section 11BB:
The petition involved a claim for interest under Section 11BB of the Central Excise Act, 1944 on a delayed excise duty refund. The petitioner, a company engaged in tea cultivation, claimed a refund under a 1999 notification exempting excise duty for 10 years. Despite appellate authorities rejecting appeals by the Revenue, a balance amount of refund remained unpaid. The writ Court, in its judgment dated 08-11-2012, upheld the petitioner's entitlement to interest under Section 11BB. It emphasized that the language of Section 11B does not differentiate between types of excise duty refunds, whether excess payment or exempted duty. The Court cited precedents and held that interest under Section 11BB is applicable automatically for any refund sanctioned beyond three months from the application date.

Issue 2: Applicability of Section 11B to exemption notifications:
The review petition challenged the writ Court's decision, citing two circulars stating Section 11B would not apply to the 1999 exemption notification. The review petitioners argued that the petitioner was not entitled to interest on the delayed refund. However, the Court rejected this contention, stating that executive circulars cannot override statutory provisions like Section 11B. It noted that the writ Court thoroughly considered these aspects before the initial judgment. The Court dismissed the review petition, stating that no grounds for review were established, and denied the rehearing requested by the review petitioners.

This case highlights the importance of statutory provisions in claiming refunds and interest under the Central Excise Act, emphasizing that the entitlement to interest under Section 11BB is not affected by exemption notifications and should be applied strictly in cases of delayed refunds, as established by legal precedents and the clear language of the law.