Petitioner entitled to interest on delayed tax refunds; waiver ignored, interest on interest denied.

The court held that the petitioner is entitled to interest under Section 11BB of the Income Tax Act for delayed refunds, emphasizing that interest payment is automatic if refunds exceed three months. The petitioner's waiver of interest was disregarded, and the court rejected the claim for interest on interest. The authority was directed to calculate and pay the interest within two months, citing legal precedents and Circular no.670/61/2002-CX to support its decision.

---

---

Issues:
Seeking direction for refund with interest under Section 11BB of the Income Tax Act, 1961 (Central Excise Act, 1944)

Analysis:
The petitioner filed refund claims in 2005, 2006, and 2007, with details mentioned in an adjudication order. While some claims were allowed, interest on pending claims was denied due to the petitioner's letter waiving interest. The petitioner argued that interest under Section 11BB of the Act is statutory and automatic, not dependent on the claim, citing Circular no.670/61/2002-CX and legal precedents. The respondent contended that the petitioner waived interest by letter. The court examined Section 11BB, emphasizing that interest payment is mandatory and automatic if refunds are delayed beyond three months. The court referred to the Ranbaxy case, clarifying that interest becomes payable if refunds are not made within three months of the application. The court held the petitioner entitled to interest under Section 11BB if refunds were delayed over three months. The petitioner's claim for interest on interest was rejected. The court directed the authority to calculate and pay the interest within two months.

This judgment addressed the issue of entitlement to interest under Section 11BB of the Act for delayed refunds. The court clarified that interest payment is automatic if refunds are not made within three months of the application, regardless of the claim by the party. The petitioner's waiver of interest was deemed irrelevant. The court referred to legal precedents and Circular no.670/61/2002-CX to support its decision. The court rejected the petitioner's claim for interest on interest but directed the authority to calculate and pay the interest within a specified timeframe.

---