TaxTMI 
TaxTMI 
2008 (7) TMI 94
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....he Central Excise Tariff Act, 1985. The respondent submitted an application under Section 11B of the Central Excise Act for refund of Excise duty paid by it. The claim of the respondent for refund was rejected by the Assistant Commissioner of Central Excise and Customs by order dated 5-5-1998. The respondent submitted second application for refund of excise duty under Section 11B of the Act to the tune of Rs. 24,00,925/- . That application for refund was also rejected by the Deputy Commissioner of Central Excise and Customs by order dated 23-3-2000. They made third claim for refund under Section 11B of the Act for refund of excise duty to the tune of Rs. 62,96,976/- That application was also rejected by order dated 29-5-1998. Being aggrieve....
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....of the department is that as the refund was made within the period of three months from the date of the order passed by the appellate authority sanctioning the refund, no interest under Section 11BB of the Act is payable. 2. For considering this appeal, the substantial question of law which, according to the learned Counsel appearing for appellant, arises is Whether the Tribunal was justified in holding that interest is payable under Section 11BB of the Act. According to the learned Counsel, interest under Section 11BB of the Act is payable only when an order for refund is made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise. He relied on the provisions of sub-section (2) of Section 11B of the Act....
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....e shall be dealt with in accordance with the provisions of sub-section (2) of substituted by that Act :] [Provided further that] the limitation of [one year] shall not apply where any 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 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 as determined by the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] under the foregoing provisions of this sub-section....
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....submitted. Perusal of sub-section (2) of Section 11B of the Act shows that, there after, the authority viz. Assistant Commissioner or Deputy Commissioner are required to hold inquiry and if at the end of the inquiry the authority is satisfied that whole or part of the duty paid is to be refunded then an order can be made accordingly by the authority. Then comes Section 11BB of the Act, which reads as under :- "Section 11BB Interest on delayed refunds - If any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, [not below five per cent]....
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....duty is not refunded within a period of three months from the date of receipt of the application to be submitted under Section 11B of the Act, then interest on the amount is liable to be paid on expiry of period of three months from the date of receipt of the application. The Explanation appearing below Section 11BB of the Act shows that it introduces deeming fiction that where the order for refund of duty paid is made not by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but is made by the Commissioner (Appeals), Appellate Tribunal or by the Court, then for the purpose of this section the order made by the Commissioner (Appeals), Appellate Tribunal or by the Court shall be deemed to be an order made u....