AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 1199
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....rvice, that are exported, is entitled to claim refund of the credit of the service tax paid on input services that remained unutilised. There are notifications issued in that regard under Rule 5 of the Credit Rules for claiming of refund of unutilised credit. 3. Petitioner filed eight refund applications as detailed in the petition. Admittedly these refund applications have been processed and refund has been granted. It is petitioner's case that as per provisions of Section 11BB of the Central Excise Act, 1944 ["The Act"] if any duty ordered to be refunded is not refunded within three months from the date of receipt of the application there shall be paid to that applicant interest at such rate, not below five percent and not exceeding thirty percent per annum that would be fixed for the time being by the Central Government, by notification in the Official Gazette. Such interest will become payable 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. 4. We are informed that current rate fixed by the Central Government is 6% per annum. 5. Petitioner is only seeking interest on the refund amoun....
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....nguage employed in Section 11-BB of the Central Excise Act, 1944 (for short, 'the Act') and further appreciating the conduct of the parties, opined that the liability for payment of interest is statutory and it is the bounden duty of the Assistant Commissioner to pay interest from 26th November, 1999 till 15th November, 2000 at the rate specified under Section 11-BB of the Act. The aforesaid conclusion impelled the Division Bench to allow the writ petition with costs which was assessed at Rs.10,000/-. The said order is the subject matter of appeal by special leave. xxxxxxxxxx 11. The facts which we have adumbrated herein-above are not in dispute. It is contended by Mr. Adhyaru, learned senior counsel appearing for the Revenue that Section 11-B which deals with grant of refund of duty has to be strictly construed and, if there is no compliance with the conditions enumerated therein, the application has to be rejected. Elucidating the said argument, learned senior counsel would submit that if there is a defective application or an application not meeting the requisite criteria stipulated under the statutory provision, it is to be held that there is no application in the e....
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....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 : Provided that where any duty ordered to be refunded under subsection (2) of section 11B in respect of an application under subsection (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." xxxxxxxxxx 17. The seminal issue is be whether there has been delay in grant of re....
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.... bearing or connection with the date from which interest under Section 11-BB of the Act becomes payable. 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 11-BB 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 implemented, the Circulars clearly state that the relevant date in this regard is the expiry of three months from the date of receipt of the application under Section 11B(1) of the Act." The ultimate conclusion was recorded thus:- "19. In view of the above analysis, our answer to the question formulated in para (1) supra is that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from ....
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....nd if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. Manifestly, interest under Section 11BB of the Act becomes payable, if on an expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpretat....
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....from the date of expiry of three months from the date of receipt of application for refund under Section 11BB(1) of the Act. 12. The division bench of this Court in Swaraj Mazda Limited vs. Union of India 2009 (235) E.L.T. 788 (Bom) also held that perusal of Section 11BB shows that if any duty recovered is found to be refundable, still the payment is not made within a period of three months from the receipt of application for refund then interest is liable to be paid. Even in that case revenue had taken the stand that the applications for refunds initially filed by petitioner were incomplete. The Court rejected this objections and held interest was payable on the refund. Paragraph 2 and 8 of the said judgment Swaraj Mazda (supra) reads as under : "2. Thereafter, the petitioner wrote letters to the authorities claiming interest under the provisions of Section 11BB of the Central Excise Act. There was no response to those letters for a long time, but ultimately by letter dated 1-1-2004 the petitioner was informed that the petitioner is not entitled to payment of any interest on the refund claim under Section 11BB of the Act. Against that letter, an appeal was filed before the Comm....
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.... if any duty recovered is found to be refundable still the payment is not made within a period of three months from the receipt of application for refund then interest is liable to be paid. Perusal of the above provision makes it clear that liability to pay interest arises on expiry of period of three months "from the date of receipt of application under sub-section(1) of Section 11B." We have already referred, to above as to how application under Section 11B is to be made, therefore, unless a finding is recorded that the application that was filed by the petitioner under Section 11B cannot be termed as an application made under Section 11B, liability to pay interest after expiry of period of three months from the date of receipt of that application cannot be denied. Firstly there is no such finding recorded in the order impugned and secondly on close examination of the order of the appellate authority dated 30-7-1999 we find that it cannot be said that the application filed by the petitioner for refund was found to be so incomplete that it would not be termed as an application at all. The revisional authority in the order impugned has observed that the appellate authority found th....