2017 (6) TMI 105 - AT - Central Excise

Interest on delayed refund - whether the appellant is required to file an application to claim interest on delayed refund in terms of Section 11BB of the CEA, 1944 or not? - Held that the issue has been examined by the Hon ble High Court of Allahabad in the case of Siddhant Chemicals 2014 (5) TMI 59 - ALLAHABAD HIGH COURT , where it was held that A bare perusal of Section 11BB of the Act, reveals that the payment of interest is not depended on the claim by the party. It is automatic - the appellant is not required to file an application to claim interest on delayed refund in terms of section 11BB of the Act - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Appeal against denial of interest on delayed refund under Section 11BB of the Central Excise Act, 1944.

Detailed Analysis:

1. Background: The appellant filed refund claims that were sanctioned after three months without interest. The appellant undertook not to claim interest, but later appealed against the non-payment of interest on delayed refunds.

2. Appellant's Argument: The consultant for the appellant contended that Section 11BB does not require filing an application for interest on delayed refunds. Cited CBEC Circular No. 670/61/2002/CE/01.10.2002 and legal precedents like Siddhant Chemicals and Hero Motors Ltd to support the claim.

3. Respondent's Position: The respondent supported the impugned orders denying interest on delayed refunds.

4. Judicial Review: The central issue was whether the appellant must file an application to claim interest on delayed refund under Section 11BB of the Act.

5. Legal Precedents: Reference was made to the judgment of the Hon'ble High Court of Allahabad in Siddhant Chemicals, emphasizing that interest payment is automatic under Section 11BB and not discretionary. The court highlighted that interest must be paid if the refund is delayed beyond three months, regardless of the party's waiver.

6. Circular and Supreme Court Ruling: The circular emphasized the automatic application of Section 11BB without waiting for instructions. The Supreme Court's ruling in Ranbaxy Laboratories Ltd. v. Union of India clarified the timeline for interest payment under Section 11BB.

7. Decision: The tribunal held that as per the settled law by the Hon'ble High Court of Allahabad, no application is needed to claim interest on delayed refund under Section 11BB. Therefore, the impugned orders were set aside, and the appeals were allowed with consequential relief.

This detailed analysis of the judgment highlights the key arguments, legal precedents, and the tribunal's decision regarding the denial of interest on delayed refunds under Section 11BB of the Central Excise Act, 1944.