Tribunal orders interest payment on delayed refund claim citing Ranbaxy case precedent

The Tribunal allowed the appeal, citing the Ranbaxy case precedent, and directed the payment of interest on the delayed refund claim. The Tribunal concluded that the appellant was entitled to claim interest for the period between filing the refund claim and its realization, as the claim had been sanctioned with a delay of three months. The remaining interest was ordered to be paid to the appellant within 30 days, deducting the amount already sanctioned.

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Issues:
- Entitlement to interest on delayed refund claim after three months from the date of filing the refund claim.

Analysis:
The appellant filed a refund claim after reversing an amount under protest, which was later appropriated by the authorities. The claim was initially rejected, but on appeal, the Commissioner (A) allowed the cenvat credit and sanctioned the refund claim after three months from the date of the order. The appellant sought interest on the delayed refund amount. The main issue was whether the appellant was entitled to claim interest after three months from the date of filing the refund claim till its realization.

The appellant argued that the issue had been settled by the Hon'ble Apex Court in the case of Ranbaxy Laboratories Ltd., where it was held that the assessee could claim interest on delayed refund after three months from the filing of the refund claim till its realization. The appellant relied on this precedent to support their claim for interest.

On the other hand, the Ld. AR contended that the facts of the Ranbaxy case were not directly applicable to the present situation, as it involved a rebate claim, whereas the current case pertained to a refund of cenvat credit. The Ld. AR highlighted that the refund claim was sanctioned after the show cause notice process was completed, and interest for the delayed refund had already been paid to the appellant.

After hearing both parties, the Tribunal referred to the precedent set by the Hon'ble Apex Court in the Ranbaxy case, emphasizing that the provisions of Section 11BB of the Act applied to both rebate and refund claims. The Tribunal concluded that the appellant was indeed entitled to claim interest for the period between the filing of the refund claim and its realization, as the claim had been sanctioned with a delay of three months. The Tribunal ordered the remaining interest to be paid to the appellant within 30 days, deducting the amount already sanctioned.

In conclusion, the Tribunal allowed the appeal, citing the applicability of the Ranbaxy case precedent and directing the payment of interest on the delayed refund claim.

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