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TMI Blog2025 (1) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... lication, the interest would be payable from 22.02.2008 till the date on which the refund has been paid to them. Rate of interest to adopted - HELD THAT:- The Allahabad Bench, in the case of M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX, NOIDA (VICE-VERSA) [ 2021 (5) TMI 870 - CESTAT ALLAHABAD] has held that ' Section 11BB provides for interest on delayed refund. It states that if any duty ordered to be refunded under sub-section (2) of Section 11B is not refunded within three months from the date of receipt of the application, then the applicant shall be entitled to interest after the expiry of three months from the date of receipt of the application at such rate not below 5% and not exceeding 30% as may be notified by the Central Government in the Official Gazette.' - thus, the appellant would be eligible for interest @ 12% per annum. Conclusion - i) The interest is required to be paid from three months from the date of the initial filing of the refund claim till the date of granting the refund. ii) The interest is to be paid @ 12% per annum. iii) Interest to be paid within 8 weeks from the date of communication of this order. Appeal allowed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of order of the Tribunal. Being aggrieved, the appellants filed their appeal before the Commissioner (Appeals), who has dismissed their appeal. Being aggrieved, the appellant is before the Tribunal. 4. The Ld Counsel appearing for the appellant makes the following submissions: A. AS PER SECTION 11BB OF THE CENTRAL EXCISE ACT, 1944 THE APPELLANT IS ENTITLED TO RECEIVE INTEREST ON DELAYED REFUND OF DUTY AFTER THE EXPIRY OF THREE MONTHS FROM THE DATE OF RECEIPT OF REFUND APPLICATION U/S 11B (1). (1) In the instant case, the Appellant had paid the payment of Rs. 17,28,454/- on 30.03.2006 under protest due to constant pressure and persuasion from the Department and filed a refund application for the same on 22.11.2007. However, the aforesaid amount was refunded only on 23.7.2019. Therefore, the provision of interest on delayed refund would apply from the date of filing of refund application. (2) The Appellant submits that as per Section 11BB of the Central Excise Act, 1944, if any duty ordered to be refunded under Section 11B(2) to any applicant is not refunded within three months from the date of receipt of application, interest shall be paid to that applicant on such duty from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the above-mentioned explanation. Thus, the Appellant is entitled to interest on delayed refund in terms of Section 11BB of the Central Excise Act, 1944. (6) In this regard, the Appellant relies on the order of the Apex court in the case of Ranbaxy Laboratories Ltd. Vs. UOI reported at 2011 (273) E.L.T 3 (S.C.) wherein the Apex Court has held that, the provisions of interest under Section 11BB are attracted automatically for refund sanctioned after an expiry of beyond a period of three months from the date of receipt of application for refund. (7) Further, reliance is placed in the case of Commissioner of C. Ex., Pune- II vs. Sulaki Chemicals Pvt. Ltd. reported in 2014 SCC OnLine Bom 5031: (2014) 310 ELT 511 wherein the Hon‟ble High Court of Bombay has held that, the appellate order allowing the refund of duty relates back to the order of the original authority and therefore by virtue of substantive Section 11BB of the Central Excise Act, 1944 interest on the refund amount has to be paid from the date immediately after three months from the date of receipt of the application to the original authority till the refund of authority. (8) Further, reliance is placed on the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue, submits that the refund was granted within 3 months from the date of the Final order passed by the Tribunal. Thus, the condition imposed under Section 11BB has been fulfilled. Accordingly, he justifies the denial of interest by the lower authorities. 8. We have heard both the side and we have gone through the appeal papers, written submissions and other documents placed before us. 9. The issue to be decided in this case is the date from which the interest would be payable by the Revenue and the rate of interest thereon. 10. We find that the issue is no more res integra. The Hon‟ble Supreme Court in the case of Ranbaxy Laboratories Ltd. Vs. UOI reported at 2011 (273) E.L.T 3 (S.C.), has held as under : The core issue which confronts us in all these appeals relates to the question of commencement of the period for the purpose of payment of interest, on delayed refunds, in terms of Section 11BB of the Central Excise Act, 1944 (for short the Act ). In short, the question is whether 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 or on the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 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. Mani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad taken the view that since the Tribunal had in its order not directed for payment of interest, no interest needs to be paid. 13. We, thus find substance in the contention of learned counsel for the assessee that in fact the issue stands concluded by the decision of this Court in U.P. Twiga Fiber Glass Ltd. (supra). In the said case, while dismissing the special leave petition filed by the revenue and putting its seal of approval on the decision of the Allahabad High Court, this Court had observed as under: Heard both the parties. In our view the law laid down by the Rajasthan High Court 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 sub- section (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 lay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant 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. 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 11BB that can be arrived at is that interest under the said Section becomes payable on the expiry of a period of three months from the date of receipt of the applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the period of 3 months for processing of this application, the interest would be payable from 22.02.2008 till the date on which the refund has been paid to them. 14. Now, we take up the issue of the rate of interest to adopted. We find that this issue also stands decided in several cases. 15. The Allahabad Bench, in the case of Parle Agro Pvt Ltd Vs CCGST, Noida 2022(380) ELT 219 (Tri-All), has held as under: 29. Section 11BB provides for interest on delayed refund. It states that if any duty ordered to be refunded under sub-section (2) of Section 11B is not refunded within three months from the date of receipt of the application, then the applicant shall be entitled to interest after the expiry of three months from the date of receipt of the application at such rate not below 5% and not exceeding 30% as may be notified by the Central Government in the Official Gazette. In the present case, the provisions of Section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggar Fibre Pvt. Ltd. Vs. Commissioner of C. Ex., Cus. CGST, Delhi reported as 2021 (378) ELT 293 (Tri.-Del.) wherein the adjudicating authority was ordered to grant interest @ 12% per annum from the date of deposit till the date of refund. The relevant Para is reproduced as under: I further take notice that Divisioin Bench of this Tribunal in Parle Agro (P) Ltd. Vs. ommissioner, CGST - 2021-TIOL-306-CESTAT ALL, wherein interest on pre-deposit (made during investigation) have been enhanced from 6% to 12%, following the ruling of the Apex Court in Sandvik Asia Ltd. Vs. Commissioner 2006 (196) E.L.T. 257 (S.C.). I further direct the Adjudicating Authority to grant interest @ 12% per annum from the date of deposit till the date of refund. Such interest should be granted within a period of two months from the date of receipt or service of the copy of this order. 16. Similar view was taken in case of Pr. Commr. of CGST, New Delhi Vs. Emmar Mgf Construction Pvt. Ltd. reported as 2021 (55) GSTL 311 (Tri.-Del.) wherein it was held that amount deposited during investigation and/or pending litigation is ipso facto pre-deposit and interest is payable on such amount to the assessee being succes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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