2015 (12) TMI 1054 - HC - Central Excise

Interest claim - Delayed refund claim - Whether in the facts and circumstance of the case, was the Tribunal right in law in allowing interest on delayed sanctioned of refund from the date of refund application, under Section 11BB of the Central Excise Act, 1944 - Held that - We has perused a decision of the Hon ble Supreme Court in the case of Ranbaxy Pharmaceuticals Limited v. Union of India, 2011 (10) TMI 16 - Supreme Court of India by which it has been held by the Honourable Supreme Court that the law to pay the interest commences from the date of expiry of three months from the date of receipt of application and not from the decision. In our view, the issue has been covered by the above decision and therefore we are of the opinion that the Tribunal has not committed any error in deciding the issue in favour of the respondents who had applied for the refund of excise duty - Decided against Revenue.

Summary

Issues: Challenge to order allowing interest on delayed refund under Section 11BB of the Central Excise Act, 1944.

Analysis:
1. The Commissioner of Central Excise and Customs challenged an order allowing interest on delayed refund under Section 11BB of the Central Excise Act, 1944. The Tribunal had held that the respondent was entitled to interest on the refund immediately after three months from the submission of the refund application. The appellant contended that interest should only be paid from the date of possession, not from the completion of three months from the application. The appellant argued that interest can only be paid after the completion of adjudication on the refund application.

2. The High Court heard arguments from the appellant's advocate and reviewed the Tribunal's order. The Tribunal had based its decision on a Supreme Court ruling in the case of Ranbaxy Pharmaceuticals Limited v. Union of India, where it was held that interest payment starts from the expiry of three months from the date of the application, not from the decision. The High Court found that the issue was settled by the Supreme Court's decision and concluded that the Tribunal did not err in favoring the respondent who applied for the excise duty refund. Therefore, the appeal was deemed meritless and summarily dismissed.

By summarizing the judgment in detail, it is evident that the High Court upheld the Tribunal's decision based on the Supreme Court's ruling regarding the payment of interest on delayed refunds under Section 11BB of the Central Excise Act, 1944.