Appeals granted interest from 26-8-1995, judgment pronounced on 4-9-2019.

The appeals were allowed in favor of the appellants, granting them interest from 26-8-1995 onwards until the refund sanction date. The judgment was pronounced in open court on 4-9-2019.

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Issues:
Appeal against denial of interest pre-Section 35FF.

Analysis:
The appellants filed appeals against the denial of interest before the introduction of Section 35FF. The appellants had availed refund schemes on specific dates ranging from 1987 to 1992. They were granted interest from 10-5-2008, the date of Section 35FF introduction. The counsel argued for entitlement to interest from 3 months after filing the refund or at least from 26-8-1995 when the proviso was added to Section 11BB of the Central Excise Act, 1944. The counsel cited cases like Union of India v. Shreeji Colour Chem Inds. and Ranbaxy Laboratories Ltd., along with Circular No. 670/61/2002-CX, to support the argument.

The Assistant Commissioner relied on the impugned order, while the Member (T) considered the rival submissions. The issue was clarified by the Hon'ble Apex Court in the case of Ranbaxy Laboratories Ltd. The court examined the issue in detail and referred to a Circular dated 1-10-2002. The court observed that the liability to pay interest under Section 11BB commences from the expiry of three months from the date of the refund claim application under Section 11B(1) and not from the order of refund. As the refund claims were filed between 7-3-1993 to 28-4-1994, and Section 11BB was introduced on 26-8-1995, the appellants were entitled to interest from 26-8-1995 until the sanction of the refund.

The appeals were allowed in favor of the appellants, granting them interest from 26-8-1995 onwards until the refund sanction date. The judgment was pronounced in open court on 4-9-2019.

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