2018 (5) TMI 1663 - AT - Central Excise

Interest on delayed refund - section 11BB of CEA - as per Department refund has been claimed by the appellant vide their application dated 01.02.2017 and the same has been paid within a period of three months - Held that - As per Section 11BB, the interest becomes due if the refund is not granted within three months from the date of receipt of refund application. In the present case, though the appellant became entitled, to refund as a result of the order dated 05.11.2009, it is seen that the claim for refund under Section 11BB has been filed on 01.02.2017 and the refund has been paid on 27.04.2017 - Since refund has been paid within three months from the date of refund application, no interest is liable to be paid in the present case. Appeal dismissed - decided against appellant.

Summary

Issues:
- Challenge to Order-in-Appeal No. 273/2017 dated 06.11.2017
- Claim of interest on refund from a specific date
- Interpretation of Section 11BB regarding payment of interest on late refund

Analysis:
The appeal before the Appellate Tribunal challenged Order-in-Appeal No. 273/2017 dated 06.11.2017, which arose from investigations by the Central Excise, Anti Evasion Wing resulting in a demand for Central Excise duty. The original demand of ?11,22,044 was reduced to ?6,51,504 in subsequent appeal proceedings. The appellant sought a refund of the excess amount paid, which was initially declined by the Assistant Commissioner, including the claim for interest. The main contention in the appeal was the entitlement to interest on the refund from the date of the Commissioner (Appeals) order dated 05.11.2009. The Department argued that since the refund application was made on 01.02.2017 and the refund was paid within three months on 27.04.2017, no interest was payable under Section 11BB.

The appellant's representative argued that the refund became due as a consequence of the order dated 05.11.2009 by the Commissioner (Appeals), and therefore, no separate application under Section 11BB was necessary. On the other hand, the Revenue's representative contended that refunds are sanctioned under Section 11B only after an application is made by the assessee, and in this case, since the refund application was dated 01.02.2017 and paid within three months, no interest was attracted under Section 11BB. The Tribunal examined Section 11BB, which stipulates that interest becomes due if the refund is not granted within three months from the date of the refund application.

After considering the arguments and the provisions of Section 11BB, the Tribunal found that although the appellant became entitled to the refund following the order dated 05.11.2009, the refund application was made on 01.02.2017 and the refund was paid on 27.04.2017 within the three-month period. Consequently, the Tribunal upheld the Commissioner (Appeals) decision that no interest was payable in this case. Therefore, the appeal was rejected based on the interpretation and application of Section 11BB regarding the payment of interest on late refunds.