2023 (5) TMI 1188 - AT - Central Excise

Grant of interest on delayed payment of refund under Section 11BB of Central Excise Act - HELD THAT - The appellant is entitled to interest on the delayed refund in view of the judgement of the Hon ble Apex Court in the case of Ranbaxy Laboratories Ltd. vs. UOI cited 2011 (10) TMI 16 - SUPREME COURT wherein the Hon ble Apex Court has 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 has filed the refund claim on 28.10.2010 which was finally sanctioned on 31.08.2020 but no interest was granted - Further, as per Section 11BB of the Act, the interest is payable after the expiry of 3 months from the date of receipt of application. Therefore, in this case, the appellant is entitled to interest on delayed payment from 27.01.2011 to till date of credit to the account of the appellant at the rate of 6% as per the statute. The original authority is directed to compute the amount of interest and pay the same within the period of 2 months from the date of receipt of this order - Appeal allowed.

Summary

Issues:
The appeal involves the rejection of interest on delayed payment of refund under Section 11BB of the Act.

Issue 1: Refund Claim and Delayed Payment of Refund
The appellant, engaged in manufacturing, filed a refund claim on 28.10.2010, which was finally sanctioned on 31.08.2020. The appellant sought interest on the delayed payment of the refund claim, which was not granted. The Ld. Counsel argued that interest is payable after 3 months from the date of receipt of the application, citing legal precedents to support the claim. The Tribunal found the appellant entitled to interest on delayed payment from 27.01.2011 until the date of credit, at the rate of 6% as per the statute. The appeal was allowed, directing the original authority to compute and pay the interest within 2 months from the date of the order.

Judgment Summary:
The Appellate Tribunal CESTAT Chandigarh heard the appeal against the impugned order rejecting interest on delayed payment of refund under Section 11BB of the Act. The appellant, engaged in manufacturing, filed a refund claim on 28.10.2010, which was sanctioned on 31.08.2020 without interest. The Ld. Counsel argued for interest based on legal provisions and precedents. The Tribunal, considering the submissions and legal precedents, found the appellant entitled to interest on the delayed refund payment from 27.01.2011 until the credit date at a rate of 6%. The appeal was allowed, directing the computation and payment of interest within 2 months from the order date.