Appellant awarded interest on delayed refund claim under Central Excise Act

The appellant filed a refund claim under the Central Excise Act, which was sanctioned after a delay. The Commissioner rejected the appellant's request for interest on the delayed refund, citing the appellant's failure to submit required documents. The Member, referencing legal precedent, ruled in favor of the appellant, stating that interest must be granted for delays exceeding three months. Consequently, the appellant was granted interest on the delayed refund claim as per Section 11BB of the Central Excise Act, and the appeal was allowed.

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Issues:
1. Delay in sanctioning refund claim.
2. Entitlement of appellant for interest on delayed refund.

Analysis:
1. The appeal was filed against the rejection of the refund claim by the Commissioner. The appellant had filed a refund claim of Rs. 90 lakhs under Section 11B of the Central Excise Act, 1944, against a pre-deposit made as per CESTAT direction. The refund was sanctioned after a delay beyond the prescribed three-month period. The appellant appealed for interest on the delayed refund, which was rejected by the Commissioner.

2. During the hearing, the appellant did not appear, and the appeal was disposed of on merit. The Assistant Commissioner representing the Revenue stated that the delay in sanctioning the refund was due to the appellant's failure to submit attested TR-6 challans. The Revenue argued that since the delay was on the part of the appellant, they were not entitled to claim interest on the delayed refund.

3. The Member carefully considered the submissions and records. It was noted that the refund claim was filed on 19/2/2009 and sanctioned on 30/9/2009, indicating a delay in the process. The appellant had submitted self-attested copies of TR-6 Challan along with the refund claim, which should have been sufficient for the refund since the pre-deposit was ordered by the Tribunal and accepted. The Member referred to a settled law case, Ranbaxy Laboratories Ltd. Vs. Union of India, where it was established that if a refund is delayed beyond three months from the filing date, the Revenue must grant interest for the delayed period.

4. Considering the facts of the case and the legal precedent, the Member concluded that the appellant was entitled to interest on the refund claim for the period beyond three months from the filing date until the sanction of the refund claim, as per Section 11BB of the Central Excise Act, 1944. Therefore, the appeal of the appellant was allowed, and they were granted interest on the delayed refund claim.

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