Delayed refund interest runs from expiry of three months after refund application, even where sanction follows appeal or revision.

Interest on delayed refund under section 11BB of the Central Excise Act, 1944 becomes payable after expiry of three months from receipt of the refund application, including where the refund is ultimately sanctioned pursuant to an appellate or revisional order treated as an order under section 11B(2). The governing principle is that the later sanction date does not postpone the commencement of interest once the statutory three-month period has lapsed. Applying that rule, interest was held payable from the day immediately after expiry of three months from receipt of the refund claim, and the assessee obtained the consequential refund-related relief.

---

---

Issues: Whether interest on the sanctioned refund was payable from the date of the refund application or from a later date linked to the appellate/revisionary order.

Analysis: Section 11BB of the Central Excise Act, 1944 governs interest on delayed refunds and, with its explanation, treats an order passed in appeal or revision as an order under section 11B(2) of the Central Excise Act, 1944 for the purpose of refund. The applicable principle, supported by the relied upon precedents accepted as governing the point, is that interest becomes payable once three months from receipt of the refund application expire and not from the later date on which the refund is actually sanctioned pursuant to appellate or revisionary proceedings.

Conclusion: The issue was decided in favour of the assessee, and interest was held payable from the date immediately after expiry of three months from the date of receipt of the refund application.

Final Conclusion: The revision succeeded and the applicant was granted the consequential refund-related relief.

Ratio Decidendi: Interest on refund under section 11BB of the Central Excise Act, 1944 runs from the expiry of three months after receipt of the refund application, including where the refund follows an appellate or revisional order treated as an order under section 11B(2) of the Central Excise Act, 1944.

---