Interest accrues post refund application till realization without separate claim; Section 11BB, CBEC Circular, Supreme Court case.

The Tribunal allowed the appeal, holding that interest accrues three months post the refund application till realization, without requiring a separate claim. The appellant was deemed entitled to interest, setting aside the rejection based on Section 11BB, as supported by a CBEC Circular and a Supreme Court case.

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Issues:
Appeal against rejection of interest claim in refund case.

Analysis:
The appellant filed refund claims for two periods, and after a long process, a refund was sanctioned without interest. Later, the appellant claimed interest, which was rejected stating the provisions of Section 11BB were not attracted. The appellant challenged this before the Commissioner (Appeals) but was deemed infructuous. The appellant argued interest is payable post three months from the refund application, citing a Supreme Court case and a CBEC Circular.

The AR supported the rejection, stating the late filing of the interest claim made it not maintainable. The Tribunal examined a CBEC Circular stressing interest payment beyond three months automatically. It concluded the appellant was entitled to interest without filing a separate claim, setting aside the impugned order. Referring to the Supreme Court case, the Tribunal held interest accrues three months post the refund application till realization, allowing the appeal with consequential relief.

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