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TMI Blog2022 (8) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... s that if any duty recovered is found to be refundable, still the payment is not made within a period of three months from the receipt of application for refund then interest is liable to be paid. The respondent shall pay interest to petitioner in compliance with provisions of Section 11BB of the Act for the period after the expiry of three months from the date of respective applications till the date of payment of refund amount in accordance with law - Petition disposed off. - WRIT PETITION NO. 2194 OF 2022 - - - Dated:- 23-8-2022 - K.R. SHRIRAM GAURI GODSE, JJ. Shri Prasad Paranjape i/b. Lumiere Law Partners for the Petitioner. Shri Dhananjay B. Deshmukh for the Respondents. ORAL JUDGMENT (K.R.SHRIRAM, J.) 1. Petitioner is engaged in the business of providing Information Technology enabled Services to its group entities located outside India. Petitioner in order to provide the output services, receives various input services and avails the credit for service tax paid thereat under Rule 3 of the CENVAT Credit Rules, 2004 [ Credit Rules ]. Petitioner s services are exported without payment of service tax which results in accumulation of CENVAT credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would not arise. 8. Shri Paranjape responded to this argument of Shri Deshmukh by submitting that three months period provided to process the claim was to enable respondent to raise objections / point out defects in the application to the applicant and if respondent would take its own time, in this case almost a year later objections were raised, respondent cannot raise the defence application being incomplete. Shri Paranjape submitted that if the applications were so defective, first of all respondent would not have granted refund and secondly respondent could have rejected the application. 9. Shri Paranjape relied upon judgment of the Apex Court in Union of India vs. Hamdard (WAQF) Laboratories 2016 (333) E.L.T. 193 (SC) where paragraph 9, 11, 12, 14, 17, 18 and 21 read as under : 9. Presently to the flash back. In pursuance of the order passed by the competent authority, an amount of Rs.3,74,00,000/- was refunded by cheque no.639266 dated 15.11.2000 payable at PNB Navyug Market, Ghaziabad. As no interest was paid by the appellant, the respondent filed a Civil Miscellaneous Writ Petition No. 249 of 2001 before the High Court of Judicature at Allahabad. The Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. 12. Mr. Upadhyay, learned senior counsel appearing for the respondent would contend that in the absence of a particular form in praesenti the application was in order from the inception and, in any case, the period commences from the date of submission of the application which is required to be filed within one year. It is put forth by him that the time runs from that day and it is open to the Revenue to ask the assessee to remove the defects and if the defects are not removed it can reject the application but it has to be done within the statutory period, but under no circumstances, there can be an assumed extension of time by the Revenue. To bolster the said submission, reliance has been placed on Ranbaxy Laboratories Limited vs. Union of India Ors. xxxxxxxxxx 14. Section 11-BB deals with interest of delayed refunds. The said provision is extracted below:- Section 11-BB Interest on delayed refunds .--If any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. 13. Manifestly, interest under Section 11BB of the Act becomes payable, if on an expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpretation of Section 11-BB that can be arrived at is that interest u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess by no stretch of imagination can be carried on beyond three months. It is required to be concluded within three months. The decision in Ranbaxy Laboratories Limited (supra) commends us and we respectfully concur with the same. 10. Like in the case of Hamdard (supra) here also is a case that pertains to grant of interest where the refund has been granted. In our view the principle laid down in Hamdard (supra) would squarely apply to the facts of the present case. It was obligatory on the part of the revenue to intimate to petitioner to remove the deficiency in the application immediately (in Hamdard (supra) it says within two days) and in any event if there were still deficiencies, Revenue could have proceeded with adjudication and rejected the application for refund. Adopting the expression used by the Apex Court in Hamdard (supra), the adjudicatory process by most stretch of imagination can be carried out beyond three months. It is required to be concluded within three months. 11. It will also be useful to reproduce paragraph 9, 10, 14 and 15 of another judgment of the Apex Court in Ranbaxy Laboratories vs. Union of India 2016 (333) E.L.T. 3 (S.C.). 9. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), relied upon by the Delhi High Court. It is evident from a bare reading of the decision that insofar as the reckoning of the period for the purpose of payment of interest under Section 11BB of the Act is concerned, emphasis has been laid on the date of receipt of application for refund. In that case, having noted that application by the assessee requesting for refund, was filed before the Assistant Commissioner on 12th January 2004, the Court directed payment of Statutory interest under the said Section from 12th April 2004 i.e. after the expiry of a period of three months from the date of receipt of the application. Thus, the said decision is of no avail to the revenue. 15. In view of the above analysis, our answer to the question formulated in para (1) supra is that the 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. (Emphasis supplied) 11. As held by the Apex Court in Ranbaxy (supra), a fiscal legislation has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent and not exceeding thirty per cent per annum as is for the time being fixed by the Central Government, by Notification in the Official Gazette, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty : Provided that where any duty ordered to be refunded under sub-section (2) of section 11B in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded 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, National Tax Tribunal or any court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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