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2016 (11) TMI 571 - AT - Central ExciseInterest on refund - Section 11 BB of the Central Excise Act, 1944 - Whether interest would be payable on the refund sanctioned w.e.f. 3 months of filing refund application, or from 3 months after the final decision in favour of the appellants by the appellate authority? - Held that - reliance placed on the decision of the case of C.C., Airport & ACC, Banglore vs. Pfizer Products India Pvt. Ltd. 2015 (9) TMI 34 - KARNATAKA HIGH COURT where it was held that the interest on delayed refund would be payable from the date of expiry of 3 months from the date of refund application, even when the issue of eligibility of refund was settled only subsequently in appeal by the Commissioner, Tribunal or Court. The Hon ble High Court has held that even in such cases, the interest would be payable from 3 months from the date of refund application. The appellants would be eligible for interest on delayed refund from the date of expiry 3 months from the date of filing the refund application as per the provisions of Section 11 BB of the Act. However as Section 11 BB was enacted only on 26.05.1999, the appellants would be eligible for interest on delayed refunds from 26.05.1999 till the date of sanction of refund - appeal allowed.
Issues Involved: Whether interest on refund should be payable from 3 months of filing refund application or after the final decision in favor of the appellants by the appellate authority.
Analysis: The issue at hand revolves around the payment of interest on refunds and the applicable timeline for such payments. The appellant argues that interest should be paid from the date immediately after the expiry of 3 months from the filing of the refund application, citing relevant legal precedents such as the decision of the Hon'ble Supreme Court in Union of India vs. Hamdard Laboratories and decisions from High Courts. The appellant also relies on Section 11 BB of the Central Excise Act, 1944, which specifies the timeline for interest payment on delayed refunds. On the contrary, the authorized representative for Revenue contends that the period of 3 months should be counted from the date of the final decision by the Commissioner (Appeals) in favor of the appellants. The Revenue's argument is based on the initial transfer of the refund to the Consumer Welfare Fund and ongoing litigation regarding unjust enrichment principles, which was eventually settled in favor of the appellants by the Commissioner (Appeals). After careful consideration of the arguments presented by both sides and a thorough examination of Section 11 BB of the Central Excise Act, 1944, along with relevant case laws, the tribunal concludes that the issue is well-settled. Referring to the decisions of the Hon'ble Apex Court and High Courts, the tribunal establishes that interest on delayed refunds should be payable from the date of the expiry of 3 months from the filing of the refund application. The tribunal emphasizes that interest accrual commences after the specified timeline, irrespective of subsequent decisions by appellate authorities or courts regarding the eligibility of the refund. In light of the legal provisions and precedents discussed, the tribunal rules in favor of the appellants, stating that they are entitled to interest on delayed refunds from the date of the expiry of 3 months from the filing of the refund application. However, considering the enactment date of Section 11 BB, the appellants are eligible for interest from the date of its enforcement until the sanction of the refund. Consequently, the appeal is allowed on these terms, as per the tribunal's decision pronounced in the open court.
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