Wakf Wins Refund Interest Claim: Delayed Payment Ordered with Costs for Non-Compliance by Assistant Commissioner.

The HC ruled in favor of the petitioner, a Wakf, mandating the Assistant Commissioner to pay interest on the delayed refund of Rs. 3,74,00,000 under Section 11BB of the Central Excise Act, 1944. The court found the refund was delayed beyond the statutory three-month period, thus entitling the petitioner to interest from 26th November 1999 to 15th November 2000. The respondents were also ordered to pay Rs. 10,000 in costs for not fulfilling their statutory obligation. The writ petition was allowed, requiring compliance within thirty days.

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Issues:
Claim for interest on delayed refund under Section 11BB of the Central Excise Act, 1944.

Analysis:
The petitioner, a Wakf engaged in the business of manufacturing and selling various items, including Rooh Afza, sought a refund of Rs. 3,74,00,000 paid under protest due to a dispute over the classification of Rooh Afza under the Central Excise Tariff Act. The Apex Court had initially classified Rooh Afza under Heading 2201.90 but later corrected it to 2202.90. The petitioner applied for a refund after the correction, and the Assistant Commissioner of Central Excise sanctioned the refund but did not pay the interest on the delayed refund as per Section 11BB of the Act.

The petitioner contended that interest is payable if the duty is not refunded within three months of the refund application. The respondents argued that the refund was delayed due to queries raised by the adjudicating authority. However, the court found the petitioner's claim justified under Section 11BB, which mandates payment of interest if the refund is delayed beyond three months from the application date.

Section 11BB imposes a statutory duty on the adjudicating authority to decide the refund claim promptly within three months. In this case, the refund application was made on 25th August 1999, but the refund order was issued on 16th November 2000, well beyond the three-month period. Consequently, the respondents were held liable to pay interest from 26th November 1999 to 15th November 2000 at the specified rate under Section 11BB.

The court allowed the writ petition, directing the Assistant Commissioner to pay interest on the refund amount within thirty days of the order. Additionally, the respondents were ordered to pay costs of Rs. 10,000 to the petitioner for failing to fulfill their statutory duty.

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