Refund interest under Section 11BB runs from expiry of three months after the original claim; a reminder letter does not restart the clock.

Interest under Section 11BB of the Central Excise Act becomes payable when a refund claim remains pending beyond three months from the original filing date. A later reminder seeking implementation of an earlier refund order cannot be treated as a fresh refund application so as to postpone or defeat the statutory interest period. Where the refund claim was filed on 21.10.2008 and the refund had already been held not hit by unjust enrichment, interest ran from the day after expiry of three months from that claim date. The denial of interest on the basis of the later reminder was unsustainable, and payment of interest on the refunded duty was directed.

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Issues: Whether the appellant was entitled to interest under Section 11BB on the refunded duty amount of Rs. 88,72,686/- from the date immediately after expiry of three months from the date of the refund claim filed on 21.10.2008, and whether the subsequent reminder letter dated 30.03.2009 could be treated as a fresh refund application so as to deny such interest.

Analysis: The duty refund claim had been filed under Section 11B of the Central Excise Act, 1944 on 21.10.2008 after the de novo adjudication. The Commissioner (Appeals) had already held that the amount of Rs. 88,72,686/- was not hit by unjust enrichment and ordered refund along with interest, and that order was not challenged by the Department. The reminder letter dated 30.03.2009 was only a request for implementation of the earlier appellate order and could not be treated as a fresh refund application. Once the refund claim was pending from 21.10.2008, interest became payable under Section 11BB after the statutory period of three months expired. The order denying interest on the basis of the later letter was therefore unsustainable.

Conclusion: The appellant was entitled to interest under Section 11BB on the refunded duty amount from the date immediately after expiry of three months from 21.10.2008, and the denial of interest was /unsustainable; this issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded and the Department was directed to pay interest on the refund in accordance with Section 11BB of the Central Excise Act, 1944.

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