2004 (6) TMI 53 - AT - Central Excise

CESTAT directs Revenue to pay interest on refund; clarifies payment period & issues timeframe for calculation

RAMA VISION LIMITED Versus COMMISSIONER OF CENTRAL EXCISE, MEERUT

The Appellate Tribunal CESTAT, New Delhi addressed the issue of non-payment of interest on a refund amount, directing the Revenue authorities to pay ... Refund Issues involved: Non-payment of interest on the refund amount.The Appellate Tribunal CESTAT, New Delhi addressed the outstanding issue of non-payment of interest on the refund amount. The Tribunal had initially allowed the refund application, which had been rejected on the ground of time bar. The appellant complained that the order was not being implemented correctly, leading to the Tribunal passing a further direction for the respondents to pay interest to the appellant in accordance with the rules.The appellant contended that the interest paid was only for the delay after the passing of the Final Order, while Section 11BB of the Central Excise Act mandated interest to be paid from the date immediately after the expiry of three months from the date of receipt of the application till the date of refund. The appellant argued that they were entitled to interest from the date of expiry of three months from the receipt of their refund application.Upon reviewing the submissions from both sides, the Tribunal observed that the period for interest payment is clearly defined in Section 11BB of the Central Excise Act. The period starts from the expiry of three months from the receipt of the refund application and continues until the date of refund, irrespective of whether the refund application was initially rejected by the Assistant Commissioner and later sanctioned by an appellate authority. The Tribunal directed the Revenue authorities to pay interest for the full period as stipulated in Section 11BB, emphasizing that the interest amount should be calculated correctly and paid to the appellant within two weeks from the date of receipt of the order.