Refund interest must be calculated from original filing date despite jurisdictional transfer under Section 11BB

CESTAT New Delhi held that appellant was entitled to interest on refund amount from three months after original filing date (11.11.2016) until payment date (13.06.2022). The Tribunal ruled that when refund claims are transferred between jurisdictional Commissionerates, interest calculation must commence from the original application date, not the transfer date. Revenue cannot selectively grant relief in similar cases. Citing SC precedent in Ranbaxy Laboratories, the Tribunal emphasized that Section 11BB mandates interest payment if refund remains unpaid after three months from application receipt. Appeal was allowed.

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The present appeal before the Appellate Tribunal concerns the grant of interest on a refund amount from the date of the application for refund. The key issue is determining the starting date for calculating interest on the refund amount. The appellant filed a refund application on 11.11.2016, which was rejected initially but later allowed by the Dy. Commissionerate, Division-Okhla, GST Commissionerate, Delhi-South. The dispute revolves around the period of delay in granting interest on the refund amount, which was approximately 2324 days from the date of the application to the date of payment of the refund.The appellant relied on Section 11BB of the Central Excise Act, 1944, which mandates the payment of interest at 6% per annum if a duty ordered to be refunded is not repaid within three months of the application date. The appellant cited two orders from other Commissionerates where interest was granted from the date of the original filing of the refund claim. On the other hand, the Department's Authorized Representative argued that interest should be calculated from the date the application was received by the concerned commissionerate, i.e., 14.06.2022.The Tribunal analyzed the issue by referencing previous orders and legal provisions. It noted that the two Commissionerates interpreted the Tribunal's order to mean that interest should be calculated from the date of the original filing of the refund claim. The Tribunal agreed with this interpretation, emphasizing that the grant of interest should relate back to the original filing date after the expiry of three months. The Tribunal also cited the Supreme Court's decision in Ranbaxy Laboratories Ltd. Vs. Union of India, which clarified the payment of interest on delayed refunds under Section 11BB of the Central Excise Act, 1944.Ultimately, the Tribunal found no merit in the impugned order and set it aside. It ruled that the appellant is entitled to interest from the expiry of three months from the date of the original filing of the refund application on 11.11.2016 until the date of payment of the refund amount on 13.06.2022. Consequently, the appeal was allowed, and the appellant was granted the interest as per the above calculation.In conclusion, the Tribunal's decision clarified the starting point for calculating interest on the refund amount, emphasizing the importance of adhering to the statutory provisions and previous interpretations in similar cases. The ruling established that interest should accrue from the date of the original filing of the refund claim after the three-month period, as mandated by Section 11BB of the Central Excise Act, 1944.

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