2019 (3) TMI 1041 - AT - Central Excise

Interest on delayed refund - section 11B and section 11BB of CEA - interest not granted on the ground that the refund has been sanctioned under directions of Hon ble High Court within the time limit prescribed by High Court and thus, no interest need to be sanctioned - Held that - The appellant had filed a refund claim on 12/10/2001 - Hon ble Apex Court in the case of Ranbaxy Laboratories Ltd. 2011 (10) TMI 16 - SUPREME COURT OF INDIA has examined the provisions of section 11B and section 11BB along with the instruction issued by CBEC at the material time and held that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. The relevant date for the purpose of calculation of refund would be the date of filing of refund claim - the appellants are entitled to interest on the said amount of refund after the expiry of 3 months from the date of receipt of the application for refund - appeal allowed - decided in favor of appellant.

Summary

Issues: Failure to grant cost of the refund claim sanctioned to the appellant.

Analysis:
The appeal was filed against the Revenue's failure to grant the cost of the refund claim sanctioned to the appellant. The appellant had deposited a certain amount as duty during an investigation against another entity. Although no Show Cause Notice was issued to the appellant, the amount deposited by them was refunded. The Hon'ble High Court directed the Revenue to decide the refund claim, which was subsequently sanctioned without interest. The appellant argued that interest should be paid, citing legal precedents like the case of Ranbaxy Laboratories Ltd. and Hamdard Laboratories. The Tribunal analyzed the situation, noting that the appellant had filed the refund claim in 2001, and based on the legal interpretation of Section 11B and 11BB, interest should be paid from the date of filing the refund claim. Relying on the legal principles established by previous judgments, the Tribunal held that the appellant was entitled to interest on the refunded amount after three months from the date of filing the refund claim. Consequently, the appeal was allowed, and interest was granted to the appellant. The judgment was pronounced on 13.02.2019.