Appellants entitled to interest on SAD refund under Section 11BB from application date

CESTAT Chennai held that appellants were entitled to interest on SAD refund under Section 11BB. The tribunal ruled that interest calculation begins from the application date, not from compliance with revenue queries. Since refunds sanctioned on 01.04.2013 exceeded the prescribed three-month period from application receipt, interest was payable. The first appellate authority's orders denying interest were set aside and appeals were allowed.

---

---

Issues Involved:
The appeal challenges the rejection of interest on refunds by the first appellate authority.

Refund Claims:
Two appellants filed refund claims for Additional Duty of Customs (SAD) on specific dates. The refund was sanctioned by Orders-in-Original dated 01.04.2013.

Key Issue:
The main issue is whether the appellants are entitled to interest on the refund as claimed by them.

Facts and Findings:
The first appellate authority rejected the interest claim, stating that the refunds were sanctioned within the prescribed three-month period. The appellants disputed this rejection and filed appeals.

Legal Interpretation:
The CESTAT bench referred to relevant legal provisions, including Section 11BB of the Central Excise Act, which mandates interest payment if refunds are not issued within three months of the refund application. The bench cited precedents supporting the payment of interest on delayed refunds.

Decision:
The CESTAT held that the appellants were entitled to interest on the refunds as the Orders-in-Original were issued beyond the three-month period from the date of the refund applications. Consequently, the orders of the first appellate authority were set aside, and the appeals were allowed with consequential benefits.


Note:
The judgment was pronounced by the CESTAT Chennai on 12.12.2023 with Mr. P. Dinesha and Mr. M. Ajit Kumar as the members.

---