Delayed rebate refunds attract statutory interest when the claim is sanctioned but payment exceeds the prescribed period.

Interest becomes payable on delayed rebate or refund under section 11BB of the Central Excise Act, 1944 when the claim is ultimately allowed and the amount is not disbursed within three months of receipt of the application. The Explanation to section 11BB treats an appellate order granting refund as an order under section 11B(2) for this purpose. A later dispute about delay in filing supporting documents does not defeat the statutory liability to pay interest once the rebate has been sanctioned and remained unpaid beyond the prescribed period.

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Issues: Entitlement to interest on delayed payment of rebate under section 11BB of the Central Excise Act, 1944 after the rebate claim had been sanctioned and the refund was not made within the prescribed period.

Analysis: The rebate claims had ultimately been found admissible, and the dispute was confined to whether interest was payable for the period of delay. The statutory scheme under section 11BB provides that where refund is not made within three months from receipt of the application, interest becomes payable. The Explanation to section 11BB treats an appellate order granting refund as an order under section 11B(2) for the purposes of section 11BB. On the facts, the revisionary authority held that the applicant was entitled to interest because the rebate was not disbursed within the statutory time limit, and the contrary view on delay in filing supporting documents did not defeat the statutory liability to pay interest.

Conclusion: Interest under section 11BB was payable to the assessee on the delayed rebate amount.

Final Conclusion: The order denying interest was set aside and the matter was sent back for computation and payment of interest, leaving the applicant entitled to the statutory benefit on the rebate claim.

Ratio Decidendi: Under section 11BB of the Central Excise Act, 1944, once a refund or rebate claim is ultimately allowed, interest is payable if the amount is not disbursed within three months of receipt of the application, and the liability is not defeated by later insistence on supporting documents.

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