2015 (10) TMI 1031 - AT - Central Excise

Claim of interest under Section 11B read with 11BB of the Central Excise Act for delayed payment of refund - refund of accumulated CENVAT credit - Held that - The issue is squarely covered by the ruling of the Hon ble Supreme Court in the case of Ranbaxy Laboratories Limited vs. Union of India - 2011 (10) TMI 16 - Supreme Court of India delivered vide order dated 21.10.2011 in which it is held that the assessee is entitled to interest on refund from the date on which three months end from the date of application. - The Board reiterated its earlier stand on the applicability of section 11BB of the Act. Significantly, the board has stressed that the provisions of Section 11BB of the Act are attracted automatically on any refund which is sanction beyond a period of three months. - Decided against Revenue.

Summary

Issues:
- Entitlement to interest on refund under Section 11B read with 11BB of the Central Excise Act.

Analysis:
The judgment revolves around the issue of entitlement to interest on refund under Section 11B read with 11BB of the Central Excise Act. The Revenue appealed against the order of the Commissioner (Appeals) granting interest from three months after the date of the refund application. The respondent-assessee had filed refund claims in 2008, which were partially allowed. Subsequently, the Commissioner (Appeals) allowed the full refund amount. The respondent sought interest on the refund, which was initially rejected but later allowed by the Commissioner (Appeals) from the end of 3 months from the date of the refund application in 2008. The Revenue contested this, leading to the appeal before the Tribunal.

The Tribunal noted that the issue was settled by the Supreme Court in the case of Ranbaxy Laboratories Limited vs. Union of India. The Court held that interest on refund becomes payable after three months from the date of the refund application under Section 11BB of the Act. The Court emphasized that the Explanation to Section 11BB does not affect the date from which interest becomes payable. The Tribunal highlighted the strict construction of fiscal legislation and cited relevant case law to support the interpretation of Section 11BB.

Additionally, the Tribunal referenced a Circular issued by the CBEC, which reiterated the applicability of Section 11BB and emphasized fixing responsibility for timely disposal of refund claims. The Circular clarified that the provisions of Section 11BB are automatically triggered for any refund sanctioned beyond three months. Based on these legal principles and precedents, the Tribunal dismissed all four appeals filed by the Revenue, affirming the entitlement of the assessee to interest on the refund from three months after the refund application date.