CESTAT Kolkata: Assessee entitled to interest on delayed refund per Central Excise Act.

The Appellate Tribunal CESTAT Kolkata ruled in a case regarding entitlement to interest on a delayed refund payment. The Tribunal upheld the Order-in-Appeal that found the assessee entitled to interest from the expiry of three months from the date of filing the refund application until the refund payment date. The Tribunal cited Section 11BB of the Central Excise Act, 1944 and a Supreme Court decision emphasizing that interest on a refund is payable if granted after three months from the relevant date. The Tribunal rejected the Revenue's appeal, affirming the assessee's entitlement to interest for the delay in refund payment.

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Issues: Entitlement to interest on delayed refund payment.

Analysis:
The appeal before the Appellate Tribunal CESTAT Kolkata involved the entitlement to interest on a delayed refund payment. The Commissioner of Central Excise, Kolkata-III filed an appeal against an Order-in-Appeal that found the assessee entitled to interest for the period after the expiry of three months from the date of filing the refund application. The Revenue argued that since the refund was given within three months from the date of the Commissioner (Appeals) order, there should be no claim for interest by the assessee.

The Tribunal considered the arguments presented by both sides. The Revenue contended against payment of interest for the period after three months from the refund application date. However, the Tribunal noted that Section 11BB of the Central Excise Act, 1944 clearly states that if a refund is due to the assessee and not refunded from the date of the application, interest is payable at the prescribed rate from the expiry of three months from the application date until the refund payment date.

Furthermore, the Tribunal referred to a decision by the Hon'ble Supreme Court in the case of Ranbaxy Laboratories Ltd. Vs. Union of India, which emphasized that interest on a refund is payable if granted after the expiry of three months from the relevant date. The Supreme Court clarified that the liability of the revenue to pay interest under Section 11BB of the Act starts from the expiry of three months from the application date, not from the date of the refund order.

Based on the analysis of the legal provisions and the Supreme Court decision, the Tribunal concluded that there was no merit in the Revenue's appeal. Therefore, the Tribunal rejected the Revenue's appeal, upholding the impugned order that found the assessee entitled to interest for the delay in refund payment.

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