2008 (9) TMI 12

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....and Central Excise Rules, 1944 (in short the 'Rules'). 3. Background facts are undisputed and are essentially as follows: Refund was claimed by the respondent before the Assistant Commissioner, Central Excise and Customs Division IV, Vadodara, for refund of Rs. 2,50,494.31. The applications which were filed under Rule 173L of the Rules were rejected by the Assistant Commissioner by order dated 24.7.1991. Being aggrieved by the said order, respondent preferred an appeal before the Commissioner of Appeal, Mumbai who remitted the matter for de novo consideration. After hearing the respondent, the said applications were again rejected. Respondent again preferred an appeal on 21.5.1996 before the Commissioner of Appeal which was dismis....

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....6 substituting the date 24.7.1991 for 21.5.1996. In other words according to the High Court the respondent was entitled to interest at the rate of 9% from 24.7.1991 irrespective of the date when Section 11 BB was inserted. The High Court primarily relied on a decision of this Court in Sandvik Asia Ltd. v. Commissioner of Income Tax I, Pune & Ors. [2006(2) SCC 508]. 4. Learned counsel for the appellant submitted that the High Court has clearly lost sight of the fact that after introduction of Section 11 BB the position relating to grant of interest has got crystalised and the grant of relief from the first date on which the application for refund was rejected cannot be sustained. It is submitted that Section 11BB makes the position clear th....

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....cess amount of advance tax under Section 214 is not paid from the date of payment of the tax. Nor is it paid till the date of refund. It is paid only up to the date of the regular assessment. No interest is at all paid on excess amount of tax collected by deduction at source. Before introduction of Section 244(1-A) the assessee was not entitled to get any interest from the date of payment of tax up to the date of the order as a result of which excess realisation of tax became refundable. Interest under Section 243 or Section 244 was payable only when the refund was not made within the stipulated period up to the date of refund. But, if the assessment order was reduced in appeal, no interest was payable from the date of payment of tax pursua....