2015 (1) TMI 269 - AT - Central Excise

Appellant Granted Relief for Delayed Refund Claims Under Section 11BB

M/s Tata Chemicals Ltd. Versus CCE Rajkot

The Tribunal allowed the appellant's appeal, granting them relief by acknowledging their eligibility for interest under Section 11BB of the Central Excise ... Delay in sanctioning of refund claim - Interest on refund claim - Whether appellant is eligible to interest under Section 11BB of the Central Excise Act 1944, on the sanctioned and paid refund claim starting from three months from the date of making refund application to the payment of refund amount - Held that:- In view of the law laid down by the Hon'ble Apex Court in Ranbaxy Laboratories Ltd Vs UoI [2011 (10) TMI 16 - Supreme Court of India] and the provisions of Section 11BB, there is no provision under Section 11BB of the Central Excise Act 1944 that relevant date for determining the rate of interest will be postponed in any eventuality. As per these provisions, interest payment accrues from the expiry of three months from the date of refund applications made under Section 11B(1) of the Central Excise Act 1944. - Decided in favour of assesse. Issues:- Eligibility of the appellant for interest under Section 11BB of the Central Excise Act 1944 on the sanctioned and paid refund claim.Analysis:1. The appellant filed eleven refund claims during September 1997 to December 1999, which were initially rejected but later allowed by CESTAT. The appellant sought interest on the delayed payment of refunds under Section 11BB of the Act. The appellant argued that interest payment is due after three months from the date of the refund application until the payment of the refund amount. The appellant relied on various case laws to support their claim.2. The Revenue contended that the orders passed by CESTAT would be deemed as orders under Section 11B(2) of the Act, and the refunds were decided within three months from CESTAT's order. The Revenue defended the lower authorities' decision to reject the appellant's claim for interest on delayed payment of refunds.3. The Tribunal analyzed the issue of whether the appellant was eligible to claim interest after three months of filing the refund applications. Refunds were sanctioned and paid on 23.02.2004. Referring to relevant case laws, including the decision in Ranbaxy Laboratories Ltd Vs UoI, the Tribunal emphasized that interest accrues automatically if refunds are sanctioned beyond three months from the date of the refund application. The Tribunal noted that there is no provision to postpone the relevant date for determining the interest rate under Section 11BB.4. Based on the legal principles established by the Supreme Court and the provisions of Section 11BB, the Tribunal allowed the appeal filed by the appellant, granting them the relief sought. The Tribunal concluded that interest payment accrues from the expiry of three months from the date of refund applications made under Section 11B(1) of the Act.5. The Tribunal's decision aligns with the interpretation of Section 11BB and the consistent stand taken by the department regarding the payment of interest on delayed refund claims. The judgment emphasizes the automatic accrual of interest beyond three months from the date of the refund application, as clarified by relevant Circulars and legal precedents.6. Ultimately, the Tribunal allowed the appeal filed by the appellant, providing them with the consequential relief sought in relation to the interest on delayed payment of refunds under Section 11BB of the Central Excise Act 1944.