Interest Awarded on Delayed Refund Petition: Court Applies Central Excise Act

The Court granted the petition under Article 226, directing the payment of interest on a sum deposited under the Central Excise Act, 1944. The Court held that interest on delayed refund, as per Section 11BB(1) of the Act, was warranted in this case. Rejecting the Revenue's argument, the Court emphasized that once a refund is granted under Section 11B, the amount must be disbursed within the specified period. Interest at the rate of 6% per annum was awarded from the expiry of three months from the date of the refund application until the actual payment date.

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Issues: Petition under Article 226 seeking interest on a sum deposited under Central Excise Act, 1944.

Analysis:
1. The petitioners sought a Writ of Mandamus or any appropriate order for interest on a sum deposited under Section 11B of the Central Excise Act, 1944. The petitioner contended that interest was due from the date of the refund application till the actual payment.

2. The legal basis for claiming interest was Section 11BB of the Act, which mandates interest on delayed refunds not paid within three months from the date of the refund application. The interest rate is set by the Central Government and ranges from 5% to 30% per annum. The petitioner argued that the refund was granted under Section 11B, and thus, interest on delayed refund should be paid as per Section 11BB.

3. The Revenue, on the other hand, argued that interest was not payable as the petitioner had not made a payment but had deposited the amount under an interim order of the Tribunal. The Revenue contended that since there was no duty payment, the interest claimed was not applicable, as stated in the Affidavit in Reply.

4. The Court examined the facts and found that the petitioner had voluntarily deposited the sum during an investigation process. The Assistant Commissioner's order confirmed the refund claim under Section 11B, but the refund was not disbursed within the stipulated time. The Court held that interest on delayed refund, as per Section 11BB(1) of the Act, was warranted in this case.

5. The Court rejected the Revenue's argument that the amount was not refunded due to a deposit and not a refund claim. The Court emphasized that once a refund is granted under Section 11B, the amount must be disbursed within the specified period. Since the refund was delayed, interest at the rate of 6% per annum was awarded from the expiry of three months from the date of the refund application until the actual payment date.

6. Ultimately, the Court made the rule absolute, directing the payment of interest at the specified rate from the due date until the actual payment date. The Court ordered the calculation and payment of the interest amount within two weeks from the date of the order, with no costs imposed on either party.

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