2021 (9) TMI 270 - HC - Central Excise

Interest on the delayed refund - delayed refund was of certain exemptions - Applicability of Section 11 BB of the Central Excise Act - HELD THAT - The writ appeal is dismissed as withdrawn subject to the condition that Revenue will pay the amount as directed by the learned Single Judge in M.K. JOKAI AGRI PLANTATIONS (P) LTD., MUTTUCK TEA ESTATE VERSUS THE UNION OF INDIA, ASSISTANT COMMISSIONER, CENTRAL GOODS SERVICE TAX, DIBRUGARH, DEPUTY COMMISSIONER, CENTRAL GOODS SERVICE TAX, DIBRUGARH, CENTRAL BOARD OF INDIRECT TAXES CUSTOMS, 2021 (2) TMI 828 - GAUHATI HIGH COURT but that shall be subject to the decision of the Hon ble Apex Court in the pending in SLP (C) No.016322/2018.. The revenue shall pay the amount within a period of three months from today. However, the interest payable shall be subject to the outcome of the SLP being SLP (C) No.016322/2018 pending before the Hon ble Apex Court.

Summary

Issues:
Challenge to order directing interest on delayed refund under Central Excise Act, applicability of Section 11 BB, reliance on Division Bench judgment, pending SLP before the Hon'ble Apex Court.

Analysis:
The High Court dealt with a writ appeal filed by the Union of India challenging an order directing the Revenue to pay interest on delayed refund to the petitioners. The learned Single Judge had relied on a Division Bench judgment and statutory provisions holding that interest is payable on delayed refunds. The Revenue contended that Section 11 BB of the Central Excise Act might not apply as it pertained to delayed exemptions, not covered by the said section. However, the appellants' counsel acknowledged that a Division Bench judgment of the Court covered the matter. He mentioned a pending SLP before the Hon'ble Apex Court related to the issue.

The appellants' counsel assured that the Revenue would comply with the Single Judge's order, subject to the decision in the pending SLP. The Respondent's counsel had no objection to this arrangement. Consequently, the writ appeal was dismissed as withdrawn, with the condition that the Revenue must make the payment within three months. The payment of interest was made subject to the outcome of the pending SLP before the Hon'ble Apex Court.

This judgment clarified the applicability of Section 11 BB of the Central Excise Act concerning delayed refunds and emphasized the obligation to pay interest on such delayed refunds. The Court's decision to dismiss the writ appeal subject to the pending SLP indicated a cautious approach to ensure compliance with the Single Judge's order while awaiting the final decision from the higher court. The acknowledgment of the Division Bench judgment's relevance reinforced the legal principles guiding the resolution of the dispute over interest on delayed refunds under the Central Excise Act.