Tribunal Corrects Interest Calculation Dates for Delayed Refunds under Section 11BB of Central Excise Act, 1944.

The Tribunal ruled that the Commissioner (Appeals) erred in determining 29.01.2020 as the relevant date for calculating interest on delayed refunds under Section 11BB of the Central Excise Act, 1944. The Tribunal held that interest should be calculated from three months after the original refund application dates: 30.03.2017, 20.06.2017, 31.07.2017, and 28.08.2017. The decision was modified to reflect this interpretation, and the appeal was allowed to the extent of correcting the interest calculation dates.

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Issues Involved:
1. Determination of the relevant date for calculating interest on delayed refunds under Section 11BB of the Central Excise Act, 1944.
2. Legality of the Commissioner (Appeals)'s decision to grant interest from a specific date.

Issue-wise Detailed Analysis:

1. Determination of the relevant date for calculating interest on delayed refunds under Section 11BB of the Central Excise Act, 1944:

The appellant argued that interest should be calculated from the date of filing the original refund applications, which were on 30.03.2017, 20.06.2017, 31.07.2017, and 28.08.2017. The Commissioner (Appeals) had granted interest from 29.01.2020, the date when the appellant requested the refund based on the Tribunal's order dated 09.01.2020.

Section 11BB of the Excise Act specifies that interest on delayed refunds is payable if the refund is not made within three months from the date of receipt of the application. The relevant date for calculating interest is the date of filing the refund application, not the date of subsequent requests or orders.

2. Legality of the Commissioner (Appeals)'s decision to grant interest from a specific date:

The Commissioner (Appeals) had construed 29.01.2020 as the date of filing the refund application and granted interest from three months after this date. However, the Tribunal found this interpretation incorrect. The Tribunal emphasized that the relevant date for calculating interest should be the original dates of the refund applications: 30.03.2017, 20.06.2017, 31.07.2017, and 28.08.2017.

The Tribunal cited several judgments, including the Supreme Court's decision in Ranbaxy Laboratories Ltd. v/s Union of India and Others, the Allahabad High Court's decision in Dabur India Ltd. v/s Union of India, and the Bombay High Court's decision in Commissioner of Central Excise, Pune-III v/s Ballarpur Industries Ltd., which all support the view that interest is payable from three months after the date of the original refund application.

Conclusion:

The Tribunal concluded that the Commissioner (Appeals) committed an illegality by considering 29.01.2020 as the relevant date for calculating interest. The correct dates for calculating interest should be three months after the original refund application dates: 30.03.2017, 20.06.2017, 31.07.2017, and 28.08.2017. The order was modified accordingly, and the appeal was allowed to the extent indicated.

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