Court clarifies interest payment rules under Central Excise Act, emphasizes strict compliance with fiscal laws.

The Court held that interest under Section 11BB of the Central Excise Act becomes payable if the refund is not made within three months from the date of the refund application, emphasizing strict construction of fiscal legislation. Referring to a Supreme Court judgment, the Court clarified that interest commences after three months from the refund application date. The Court directed the respondent to consider the petitioner's interest claim within eight weeks, in line with the Supreme Court precedent. The Writ Petition was disposed of without costs.

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Issues:
Mandamus to direct consideration of interest on rebate sanctioned beyond three months under Section 11BB of the Central Excise Act, 1944.

Analysis:
The petitioner sought a mandamus directing the Assistant Commissioner (GST) to consider the representation dated 19.12.2019 and subsequent reminders seeking payment of interest on the rebate sanctioned beyond the three-month period from the date of filing the claim under Section 11BB of the Central Excise Act, 1944. The petitioner relied on the language of Section 11BB, emphasizing that interest is payable if the refund/rebate is not sanctioned within three months from the date of the refund claim. Reference was made to a judgment of the Hon'ble Supreme Court in the case of Ranbaxy Laboratories Ltd. v. Union of India (273 ELT 3) to support this contention.

The Court examined the provisions of Section 11BB and highlighted that interest becomes payable if the refund is not made within three months from the date of the refund application. The Court clarified that the Explanation to the Proviso of Section 11BB does not affect the date from which interest becomes payable. It was emphasized that interest under Section 11BB is triggered after the expiry of three months from the date of the refund application, not from the date of the refund order. The Court reiterated the principle of strict construction of fiscal legislation and emphasized that interest under Section 11BB commences from the date of the expiry of three months from the receipt of the refund application.

The judgment referred to a circular by the Central Board of Excise and Customs stressing the importance of disposing rebate/refund claims within three months from the date of application. The Court concluded that the liability of the revenue to pay interest under Section 11BB starts from the date of the expiry of three months from the receipt of the refund application under Section 11B(1) of the Act. The judgment of the Hon'ble Supreme Court in the case of Ranbaxy Laboratories Ltd. was deemed applicable to the present matter.

The Court directed the respondent to consider the petitioner's representation seeking interest in light of the judgment in the case of Ranbaxy Laboratories Ltd. within eight weeks from the date of the judgment. The Writ Petition was disposed of accordingly, with no costs awarded.

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