2007 (8) TMI 586 - AT - Central Excise

Tribunal grants refund with interest under Sec. 11BB, emphasizes timely disbursement to avoid appeals

The Tribunal allowed the appellant's miscellaneous application, directing the Assistant Commissioner to grant a refund of Rs. 29,00,612/- along with ... Interest on refund - Relevant date Issues:1. Refund claim for Rs. 29,00,612/- along with interest under Rule 41 of CESTAT Procedure Rules.2. Discrepancy in the refund amount sanctioned by the Assistant Commissioner.3. Entitlement of interest under Sec. 11(BB) in case of delayed refunds.4. Interpretation of Sec. 11BB regarding the grant of interest with reference to the date of application for refund.5. Applicability of interest rates and quantum of refund.Analysis:1. The appellant filed a miscellaneous application seeking directions for the Central Excise authority to grant a refund of Rs. 29,00,612/- along with applicable interest. The final order allowed the appeal with consequential relief, but the Assistant Commissioner sanctioned a lesser amount. The appellant claimed entitlement to interest under Sec. 11(BB) and requested the bench to direct the authority to implement the order under Rule 41 of CESTAT Procedure Rules.2. The Tribunal reviewed the records and noted that the refund claim was not hit by unjust enrichment. It was established that the refund should have been disposed of within 3 months, and any delay beyond that entitled the claimant to interest under Sec. 11(BB). The Tribunal clarified that interest is linked to the date of the refund claim application, not the order granting the refund. The lower authority's reluctance to grant refunds in deserving cases necessitates appeals to higher authorities, causing hardship to claimants.3. The Tribunal emphasized that the appellant was entitled to interest as per Sec. 11BB, which came into effect in 1995. The interest payment would start after three months from the date the Finance Bill 1995 received the President's assent. The Tribunal directed the Assistant Commissioner to pay interest on the refund amount as per the rates notified by the Government at different periods.4. Regarding the quantum of refund, the Tribunal noted that the original authority had not granted the full amount claimed due to lack of proper evidence for a part of the amount. The appellant was advised to address the quantum of refund before the Commissioner (Appeals). However, the Tribunal affirmed the appellant's entitlement to interest under Sec. 11BB and instructed the Assistant Commissioner to implement the final order by paying interest on the refund amount.5. The miscellaneous application was allowed, and the judgment was pronounced in open court on 17-8-2007 by the Tribunal.