2018 (2) TMI 620 - AT - Central Excise

Refund claim - finalization of provisional assessment - denial on the ground of unjust enrichment - Held that - It is not in dispute that consequent to the finalization of provisional assessment, the appellant had filed the refund claim of the excess duty of ₹ 49,17,209/- paid during the period of provisional assessment - The appellant had claimed interest from 18.04.1999 i.e. three months after filing the refund claim till the payment of the refund amount to them i.e. 20.09.2012. When the facts are clear and not in dispute that the refund claim was filed on 18.01.1999, the interest under Section 11BB is attracted three months after expiry of the refund application - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Entitlement to interest under Section 11BB of Central Excise Act, 1944 after the refund claim.
- Interpretation of Section 11BB regarding the commencement of interest payment.

Analysis:
- The appeal was filed against an order-in-appeal passed by the Commissioner (Appeals) Daman, regarding the refund of excess duty paid by the appellant due to provisional assessment under MRP based assessment. The appellant claimed the assessment should have been based on the transaction value of the goods under Section 4 of the Central Excise Act, 1944. The refund application was initially rejected on the grounds of unjust enrichment, leading to litigation until being settled by the Hon'ble Gujarat High Court. The appellant sought interest under Section 11BB from the date of the refund claim till the payment was made. The issue revolved around the entitlement to interest under Section 11BB post the refund claim. The appellant cited judgments by the Hon'ble Supreme Court to support their claim.

- The Revenue contended that interest on the refunded amount should be rejected due to a Special Leave Petition (SLP) filed by the department against the High Court's order. However, no stay was granted by the Hon'ble Supreme Court. The Tribunal found that the issue was covered by the judgment of the Hon'ble Supreme Court in a similar case. The Court's interpretation of Section 11BB clarified that interest becomes payable three months after the refund claim if the amount claimed is not refunded within that period. Therefore, interest under Section 11BB commences from the date of expiry of three months from the receipt of the refund application, not from the date of the order of refund. As the facts indicated that the refund claim was filed on 18.01.1999, the appellant was deemed eligible for interest from 18.04.1999 till the payment was made. Consequently, the appeal was allowed in favor of the appellant.