2024 (9) TMI 771 - HC - Central Excise

Request for grant of interest on delayed refunds - rejection with an advise that petitioner may file an appeal against the order in original - Respondent submitted that if only petitioner had made this submissions to the officer before the impugned order dated 15th December 2020 was passed, he might have consider and allowed interest - HELD THAT - The respondents are not agreed upon, in as much as the officer should be aware of what the law is and the law was as confirmed by the circular issued by the Board that Section 11BB of the Act is attracted automatically for any refund sanctioned beyond a period of three months. In view of the provisions of law, instead of quashing and setting aside the order dated 15th December 2020 and adding to the burden of the officers, the Respondent No. 3 or 4 or the appropriate officer are directed to work out the interest payable at the notified rate and that would mean the rate notified on 15th December 2020 as provided under Section 11BB of the Act and pay the amount within four weeks from the date this order is uploaded. Petition disposed off.

Summary

Issues:
- Grant of interest on delayed refunds under Section 11BB of the Central Excise Act, 1944.
- Interpretation of Circular No. 670/61/2002-CX issued by the Central Board of Excise and Customs.
- Application of legal provisions for interest on refunded amounts.
- Compliance with the law by the concerned officer.

Analysis:

The petitioner approached the court aggrieved by the rejection of their request for interest on a refunded amount as per a letter dated 19th January 2024. The refund was granted under Section 11B of the Central Excise Act, 1944, but no interest was provided under Section 11BB. The petitioner contended that interest should have been automatically granted as per the Act and a circular issued by the Central Board of Excise and Customs. The respondent argued that if the petitioner had raised this issue before the original order was passed, interest might have been considered. The court disagreed, emphasizing that the officer should be aware of the law, especially regarding the automatic application of Section 11BB for refunds beyond three months.

The court referred to a judgment in a similar case, Qualcomm India Pvt. Ltd. vs. Union of India, which supported the petitioner's entitlement to interest under Section 11BB. In light of the legal provisions and to avoid burdening officers with additional appeals, the court directed the appropriate officer to calculate and pay the interest at the notified rate within four weeks of the order. The court explicitly stated that the petitioner's excuse for reapplying for interest or submitting the order copy would not be entertained. Failure to comply with the court's directive would be considered willful disobedience.

Ultimately, the petition was disposed of, and the advocate for the respondent was instructed to provide the necessary information to the concerned officer. The judgment highlighted the importance of adhering to legal provisions for interest on delayed refunds and underscored the responsibility of officers to comply with the law without necessitating further appeals.