Refund interest under Section 11BB runs from the original application date; later reminders do not restart the clock.

Section 11BB interest on refund runs from the date of the original refund application, not from a later reminder treated as a fresh claim. A reminder letter does not reset the statutory clock, and once an appellate order has already set aside rejection of the refund, the department cannot reopen the matter through re-quantification proceedings or deny interest on the theory of a new claim. The result is entitlement to refund interest from the original application date with consequential relief.

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Issues: (i) Whether interest on refund was payable from the date of the original refund application or from the date of the subsequent reminder letter treated as a fresh claim; (ii) Whether the subsequent proceedings to re-quantify the refund and deny interest were legally sustainable.

Issue (i): Whether interest on refund was payable from the date of the original refund application or from the date of the subsequent reminder letter treated as a fresh claim.

Analysis: The refund application had first been filed on 17.07.2018. The later letter dated 02.07.2021 was only a reminder and could not be treated as a fresh refund claim. Under Section 11BB of the Central Excise Act, 1944, interest becomes payable after expiry of three months from receipt of the refund application, and the relevant date is the date of the original application, not the date on which refund is eventually sanctioned or restated by the department.

Conclusion: Interest was payable from 17.07.2018, and the denial of interest on the footing of a fresh claim was unsustainable.

Issue (ii): Whether the subsequent proceedings to re-quantify the refund and deny interest were legally sustainable.

Analysis: The earlier appellate order had already set aside the rejection of refund, and no further challenge had been laid against that order. The adjudicating authority could not, on the premise of a supposed fresh claim, reopen the matter to re-quantify the refund and deny interest. The subsequent show cause notice lacked legal sanctity on this basis.

Conclusion: The subsequent proceedings were not legally sustainable.

Final Conclusion: The appeal succeeded and the appellant was held entitled to refund interest calculated from the date of the original refund claim, with consequential relief as per law.

Ratio Decidendi: Interest on a refund claim is computed from the date of the original application for refund, and a subsequent reminder or procedural re-processing does not reset the statutory commencement date for interest under Section 11BB.

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