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TMI Blog2019 (11) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... e expiry of three months from the date of filing refund application and not from the date of favourable order of Appellate Authority. From the reading of Section 11BB, it is quite apparent that liability of interest relates back to date of filing application and not date of order passed by one or another authority. As the respondents failed to sanction refund within three (03) months from the date of application, thus they are liable to pay interest for the delayed period - In the present case, refund application was filed on 03.09.2009 (P-1) which was rejected by the respondent vide order dated 30.04.2010. The refund was ultimately sanctioned on 27.09.2018 when the Tribunal allowed appeal of the petitioner, thus, respondents are liable to pay interest w.e.f. expiry of three (03) months from 03.09.2009. The respondents are hereby directed to pay interest at prescribed rate within one (01) month from the date of receipt of certified copy of this order, failing which the Sanctioning/Competent Officer shall be liable to pay interest @ 6% on the amount due from his/her own pocket, apart from liable to be hauled up in contempt proceedings - petition allowed. - Civil Writ Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 27.09.2018 (Annexure P-4) sanctioned refund of duty but declined claim of Interest. 5. Mr. Jagmohan Bansal, counsel for the petitioner contended that present matter is squarely covered by judgement of Hon ble Supreme Court in the case of Ranbaxy Laboratories LTd Versus UOI, 2011 (273) ELT 3 which has been followed by this Hon ble Court in the case of Om Refoils Ltd. Versus UOI , CWP No. 13714 of 2016 , decided on 18.01.2018 . 6. Counsel for the respondent contended that interest was paid within three (03) months from the date of order passed by the Tribunal, thus department is not liable to pay interest. 7. After having scrutinized record of the case and hearing arguments of both sides, we find that as per Section 11BB of the Central Excise Act, 1944, if duty is not refunded within three (03) months from the date of application, applicant is entitled to interest. In the present matter, refund application was filed on 03.09.2009 which was rejected and the petitioner unsuccessfully assailed said order before Commissioner (A). The petitioner filed further appeal before the Tribunal which vide order dated 21.02.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund : Provided that the amount of duty of excise and interest, if any, paid on such duty of excise as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to --- ( a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; ( b) unspent advance deposits lying in balance in the applicant s current account maintained with the Commissioner of Central Excise; ( c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; ( d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty. Explanation : Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal or any Court against an order of the Assistant Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, by the Court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section. 9. It is manifest from the afore-extracted provisions that Section 11BB of the Act comes into play only after an order for refund has been made under Section 11B of the Act. Section 11BB of the Act lays down that in case any duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omatically for any refund sanctioned beyond a period of three months. The Circular reads thus: Circular No. 670/61/2002-CX, dated 1-10-2002 F. No. 268/51/2002-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Non-payment of interest in refund/rebate cases which are sanctioned beyond three months of filing regarding I am directed to invite your attention to provisions of section 11BB of Central Excise Act, 1944 that wherever the refund/rebate claim is sanctioned beyond the prescribed period of three months of filing of the claim, the interest thereon shall be paid to the applicant at the notified rate. Board has been receiving a large number of representations from claimants to say that interest due to them on sanction of refund/rebate claims beyond a period of three months has not been granted by Central Excise formations. On perusal of the reports received from field formations on such representations, it has been observed that in majority of the cases, no reason is cited. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt succinctly in the case of J.K. Cement Works v. Assistant Commissioner of Central Excise Customs reported in 2004 (170) E.L.T. 4 vide Para 33: A close reading of Section 11BB, which now governs the question relating to payment of interest on belated payment of interest, makes it clear that relevant date for the purpose of determining the liability to pay interest is not the determination under subsection (2) of Section 11B to refund the amount to the applicant and not to be transferred to the Consumer Welfare Fund but the relevant date is to be determined with reference to date of application laying claim to refund. The non-payment of refund to the applicant claimant within three months from the date of such application or in the case governed by proviso to Section 11BB, nonpayment within three months from the date of the commencement of Section 11BB brings in the starting point of liability to pay interest, notwithstanding the date on which decision has been rendered by the competent authority as to whether the amount is to be transferred to Welfare Fund or to be paid to the applicant needs no interference. The special leav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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