2017 (10) TMI 1179 - AT - Central Excise

Tribunal questions Deputy Commissioner's interpretation of Section 11BB, emphasizes adherence to legal provisions

M/s M & B Footwear Pvt. Ltd. Versus Commissioner of Central Excise, Noida

The Tribunal found the Deputy Commissioner's interpretation of Section 11BB of the Act to be contrary to the Supreme Court ruling and CBEC circulars. The ... Interest on delayed refund - Section 11BB of the CEA - relevant date - Held that: - interest on delayed refund is payable under Section 11BB of the Act on expiry of the period of three months from the date of application under Section 11B(1) of the Act and not from the date of order of refund or appellate order - we direct Mr. Mahabir, Deputy Commissioner, Central Excise/ GST, Division-II, C-56/42, Sectory-62, Noida - 201307 to file an explanation/ show cause reply, as to why not a reference be made to the Hon'ble Allahabad High Court for drawing the proceedings of contempt under the Contempt of Court Act for disobeying the mandate of law amounting to interference in the dispensing of Justice. Issues:- Refund claim for principal amount allowed but interest on delayed refund rejected by Deputy Commissioner- Interpretation of provisions of Section 11BB of the Act by Deputy Commissioner contrary to Supreme Court ruling- Allegation of interference in the process of administration of justice by Deputy CommissionerAnalysis:The judgment pertains to a Miscellaneous Application under Rule 41 of CESTAT Procedure Rules concerning an appeal where the appellant was allowed consequential benefits. The appellant sought a refund with interest on delayed refund, citing Section 11B and 11BB of the Act. The Deputy Commissioner, in his order, allowed the principal amount refund but rejected the interest component, stating that interest is applicable only after three months from the date of refund application or order. The counsel for the appellant argued that this interpretation contradicts the Supreme Court ruling in the case of Ranbaxy Laboratories Ltd. v. Union of India, emphasizing that interest accrues after three months from the date of the refund application. The Tribunal noted that the Deputy Commissioner's interpretation was contrary to the law laid down by the Supreme Court and CBEC circulars, terming it as interference in the administration of justice.The Tribunal directed the Deputy Commissioner to provide an explanation for not being in contempt of court for disobeying the law and interfering with justice. Alternatively, the Deputy Commissioner was given a final opportunity to grant interest to the appellant and submit a compliance report by a specified date. The order was to be issued to the parties and the Deputy Commissioner, with a copy sent to Member-L&J(CBIC)/CBEC, North Block, New Delhi. The Tribunal's decision highlighted the importance of adhering to legal provisions and court rulings in matters of refund claims and interest entitlement, emphasizing the need to avoid interference in the dispensation of justice.