TaxTMI 
TaxTMI 
2016 (3) TMI 1045
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....an. A show cause notice dated 29.3.2001 was issued by the DGCEI, Mumbai, to the assessee and others. The Commissioner (Adjudication), Central Excise, Mumbai, confirmed the show cause notice for duty amount of Rs. 4,86,96,400/- against the assessee and appropriated the amount of Rs. 1 crore paid by them and also imposed equal penalty of Rs. 4,86,96,400/-. Being aggrieved by the said adjudication order, the assessee filed appeal before CESTAT, Mumbai and the CESTAT has set aside the order-in-original vide its order dated 6.9.2005. Consequently, the assessee filed a refund claim of Rs. 1,00,00,000/- along with interest of Rs. 49,11,000/- in view of the CESTAT order. The refund claim of Rs. 1 crore was sanctioned by the Assistant Commissioner of Central Excise, Pune vide order-in-original dated16.3.2006. However, the interest claimed by the assessee was rejected by him. Against the said order, the assessee filed appeal before the Commissioner (Appeals) who has set aside the order-in-original and allowed the appeal of the assessee for grant of interest as claimed by the assessee. Against the said order of the Commissioner (Appeals), the department has filed the present appeal. 3. The....
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....ch duty has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty of excise and interest, if any, paid on such duty as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise]under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to - (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's account current maintained with the Commissioner of Central Excise; (c) refund of credit of ....
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....b-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty. Explanation.- Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or any court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section." 3.1 He further submitted that the Commissioner (Appeals) while passing the order-in-appeal has not considered the provisions of Section 11BB of the Central Excise Act, 1944 and has also not considered the factual position inasmuch as the assessee had paid the said amount during the course of investigation and the duty liability was subsequ....
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....dable. The application, as submitted by Mr. Adhyaru, has to be an application in law. Section 11-BB which deals with interest on delayed refund clearly and categorically predicates that if any duty ordered to be refunded under sub-section (2) of Section 11-B is not refunded within three months from the date of receipt of the application under Section (1) of Section 11-B, there shall be paid to the applicant interest at the notified rate from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty. The significant words are "expiry of three months from the date of receipt of such application". In the instant case, the application was filed on 25th August, 1999. The said application, needless to emphasise, was preferred under sub-section (2) of Section 11-B. We have been apprised of the circular dated 30th May, 1995. It deals with interest of delayed refund under Section 11-BB. Paragraph 2 of the said circular being relevant is reproduced below:- "2. Keeping the above in view, the following instructions are being issued regarding refunds claimed under section 11 BB of CE & SA, 1944:- (a)....
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....period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpretation of Section 11BB that can be arrived at is that interest under the said Section becomes payable on the expiry of a period of three months from the date of receipt of the application under Sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable. [Emphasis supplied]" 18. While dealing with the said facet, the Court also referred to circular dated 01.10.2002 issued by the Central Board of Excise and Customs, New Delhi whereby a direction was issued to fix responsibility for not disposing of the refund/rebate claims within three months from the date of receipt of the application. Appreciating the import of the said circular, the Court opined as follows:- "12. Thus, ever since Section 11BB was inserted in the Act with effect from 26th May 1995, the department has maintained a consistent stand about its interpretation. Explaining the intent, import and the manner in which it is to be imple....