2017 (11) TMI 937 - AT - Central Excise

Interest on delayed refund - Section 11BB of CEA, 1944 - Held that - the issue of allowing interest under Section 11BB of CEA, 1944 on delayed refund is no more res integra in view of the judgment of the Hon ble Supreme Court in the case of Ranbaxy Laboratories Ltd. 2011 (10) TMI 16 - Supreme Court of India , where it was held that 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 Appellant are entitled to interest on expiry of three months from the date of filing of refund claims - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Entitlement to interest under Section 11BB of CEA, 1944 on delayed refund.

The judgment addresses the issue of allowing interest under Section 11BB of CEA, 1944 on delayed refunds. The Appellant filed refund claims in 1998 and 1999, seeking refunds of duty paid under protest. Show cause notices were issued proposing rejection of the claims on various grounds. The matter went through multiple stages of adjudication and appeals. The Tribunal previously decided in favor of the Appellant, leading to a refund claim being sanctioned by the Deputy Commissioner. However, the claim for interest was not considered. The Appellant contended that they were entitled to interest three months after the expiry of the refund claims, citing a Supreme Court judgment in the case of Ranbaxy Laboratories Ltd. The Tribunal analyzed the provisions of Section 11BB and the Supreme Court's interpretation, emphasizing that interest becomes payable if the claimed amount is not refunded within three months from the application date. The judgment highlighted a Circular emphasizing the automatic applicability of interest provisions for refunds sanctioned beyond three months. The Tribunal, following the Supreme Court's precedent, ruled in favor of the Appellant, setting aside the impugned order and allowing the Appeal with consequential relief as per law.

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