2018 (2) TMI 638 - AT - Central Excise

Demand of interest - relevant date - Section 11BB of the CEA - Held that - CBEC has issued a Circular No.670/61/2002-CE dated 01.10.2002 wherein the specific directions were given for dealing with the issue of interest on delayed refund - it flows that if there is delay in sanctioning the refund claim then interest flows automatically and appellant is entitled for interest. There is no requirement to file a claim of interest by the appellant. It was not required by the appellant to claim interest as it flows automatically that while sanctioning refund, if same is not sanctioned within three months from the date of application of refund - appellant is entitled to claim interest after three months from the date of application for refund claim till its realisation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of interest claim in refund case.

Analysis:
The appellant filed refund claims for two periods, and after a long process, a refund was sanctioned without interest. Later, the appellant claimed interest, which was rejected stating the provisions of Section 11BB were not attracted. The appellant challenged this before the Commissioner (Appeals) but was deemed infructuous. The appellant argued interest is payable post three months from the refund application, citing a Supreme Court case and a CBEC Circular.

The AR supported the rejection, stating the late filing of the interest claim made it not maintainable. The Tribunal examined a CBEC Circular stressing interest payment beyond three months automatically. It concluded the appellant was entitled to interest without filing a separate claim, setting aside the impugned order. Referring to the Supreme Court case, the Tribunal held interest accrues three months post the refund application till realization, allowing the appeal with consequential relief.