Court orders interest payment under Section 11BB for delayed refund.

The court held the respondents liable to pay interest under Section 11BB of the Central Excise Act on the delayed refund amount. The petitioner, who had deposited a sum as per an order that was later quashed, filed for a refund which was delayed until 2010. The court found the delay attributable to the department, causing harassment to the petitioner. Relying on evidence of varying interest rates, the court allowed the writ petition and directed the respondents to pay interest as per the prescribed rates, granting them two months to make the payment.

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Issues: Liability of respondents to pay interest under Central Excise Act, 1944 on refund amount.

The judgment pertains to a writ petition filed regarding the liability of the respondents to pay interest under the Central Excise Act, 1944 on a refund amount. The petitioner had deposited a sum of Rs.2.25 lacs as per the order of the CEGAT, which was later quashed, making the amount refundable. The petitioner filed for a refund, which was delayed until 2010, prompting the petition due to non-payment of interest on the refunded amount.

The petitioner claimed entitlement to interest under Section 11-BB of the Central Excise Act, citing rates notified by the Central Government during the relevant period. The respondents argued that the petitioner should pursue the statutory remedy of appeal instead. The court noted that the facts were undisputed, the appeal had been allowed, and the only dispute was regarding the liability to pay interest on the refunded amount.

The court analyzed Section 11BB, which mandates interest on refund amounts from three months after the refund application until the actual refund, without exceptions. The delay in refund was attributed to the department, causing harassment to the petitioner. The court also highlighted the fault on the department's end as per the counter affidavit, further supporting the petitioner's claim for interest under Section 11BB.

The petitioner presented a chart showing varying interest rates prescribed by the Central Government over time. The court accepted this chart as evidence, concluding that the petitioner was indeed entitled to interest for the delayed refund amount. Consequently, the writ petition was allowed, holding the respondents liable to pay interest as per the prescribed rates. The respondents were given two months to calculate and pay the interest from the specified period to the petitioner. No costs were awarded in the matter.

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