Interest on Excise Refunds: entitlement affirmed, payable from three months after 26.05.1995 at notified government rates.

Petitioner deposited excise duty under protest and, following favourable appellate orders, is entitled to statutory interest on the refunded duty under the statutory refund framework; interest is payable at the rate notified by the Government and commences after the expiry of the three month period following introduction of the Finance Bill, 1995 (i.e., post the prescribed commencement point). The record of earlier refund requests and the respondent's delay in sanctioning the refund until late 2000 informed the award of interest, and the petition was allowed.

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Issues: Whether the petitioner is entitled to interest on delayed refund of excise duty deposited under protest and, if so, from which date and at what rate.

Analysis: The petitioner deposited excise duty under protest and obtained favourable orders on appeal. Multiple letters seeking refund were sent to the respondent, and the respondent eventually directed formal applications and processed the refund only after pursuing appellate remedies. Section 11BB of the Central Excise Act, 1944 (w.e.f. 26.05.1995) prescribes entitlement to interest on refunds and provides the framework for rate and commencement; for pending refund applications interest becomes payable after the expiry of three months from the date of introduction of the Finance Bill, 1995. The record shows the petitioner sought refund prior to 26.05.1995 and continued to press for refund thereafter; the respondent did not contest receipt of earlier refund requests and delayed sanction until 29.12.2000.

Conclusion: The petitioner is entitled to interest on the refunded excise duty at the rate notified by the Government and prevailing for the relevant period, commencing after the expiry of three months from 26.05.1995. The petition is allowed in favour of the petitioner.

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