TaxTMI 
TaxTMI 
2025 (1) TMI 479
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....lly, the issue got clarified that the Service Tax is payable from 1.7.2010 only. 2. The appellants filed their refund claim for Rs.25,33,720 on 22.11.2007. The Revenue issued SCN on 14.01.2008, seeking to know as to why the refund claim should not rejected. After due process, vide OIO dated 14.11.2008, the refund claim was rejected. Being aggrieved the appellants filed their appeal before the Commissioner (Appeals), who upheld the OIO and dismissed the appeal filed by the appellant. Against this OIA, the appellant filed their appeal before the Tribunal, which vide Final Order No. FO/76835-76838/2018 dated 29-10-2018, held that no Service Tax was required to be paid during the impugned period and remanded the matter back to the Adjudicating authority to verify the claim of the appellant about making their payment „Under Protest‟. 3. In pursuance to the above mentioned CESTAT Order, the Appellant vide letter dated 01.02.2019, has submitted an application along with acknowledged original copy of protest letter dated 28.03.2006 and requested the refund to be granted. Out of the total refund of Rs. 25,33,720/-, the Asst Commissioner granted the refund of Rs. 17,28,454/....
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....The Appellant submits that, in terms of Section 11BB of the Central Excise Act, 1944, they are entitled to receive interest on the delayed refund from 22.2.2008 (three months from the date of application for refund letter filed before the Department i.e. 22.11.2007 in this case) to 23.7.2019 i.e. the date of refund. (4) Further, the Appellant submits that the explanation under Section 11BB of the Central Excise Act, 1944 specifically states that where any order of refund is made by the Commissioner (Appeals) or Appellate Tribunal, against an order of the Assistant Commissioner/Deputy Commissioner of Central Excise under section 11B(2), the order passed by the Commissioner (Appeals) or Appellate Tribunal as the case may be, shall be deemed to be an order passed under the section 11B(2). The aforesaid explanation is reproduced herein as under: "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),....
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....nerate reported at 2021 (9) TMI 22 , wherein it has been held the date of initial filing of the refund claim has to be considered and not the date of the order passed by the Tribunal. 5. On the basis of all the above judicial pronouncements, the Appellant most submits that, the Appellant is entitled to receive interest on the delayed refund from the date 22.02.2008 (i.e. immediate three months from the date of receipt of refund application letter by the Department which is 22.11.2007 in this case) till the date of receipt of refund i.e. 23.7.2019 in terms of Section 11BB of the Central Excise Act, 1944. (B) THE APPELLANT IS ENTITLED TO RECEIVE INTEREST @ 12% P.A. BE TILL THAT DATE OF REFUND ON ACCOUNT OF DELAYED REFUND OF DUTY. (1) It has been held in the following case laws that the refund is required to be granted along with interest @ 12% per annum : Parle Agro Pvt. Ltd. v. Commissioner 2022 (380) ELT 219 (Tri.-All) Riba Textiles Ltd. Village Chidana, Tehsil Gohana Distt. Sonepat, Haryana v. Commissioner of Central Excise and Service Tax, Panchkula 2022 (62) GSTL 136 (P&H) (2) In view thereof, interest at the rate of 12% is liable ....
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....ry, 2005. On 21st April 2005, appellant filed a claim for interest under Section 11BB of the Act on account of delay in payment of rebate Section 11BB, the pivotal provision, reads thus: "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 and not exceeding thirty per cent per annum as is for the time being fixed by the Central Government, by Notification in the Official Gazette, on such duty 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 : Provided that where any duty ordered to be refunded under sub-section (2) of section 11B in respect of an application under sub-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 sect....
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....this juncture, it would be apposite to extract a Circular dated 1st October 2002, issued by the Central Board of Excise & Customs, New Delhi, wherein referring to its earlier Circular dated 2nd June 1998, 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 application, the Board has reiterated its earlier stand on the applicability of Section 11BB of the Act. Significantly, the Board has stressed that the provisions of Section 11BB of the Act are attracted "automatically" for any refund sanctioned beyond a period of three months. The Circular reads thus: "Circular No.670/61/2002-CX, dated 1-10-2002 F.No.268/51/2002-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Non-payment of interest in refund/rebate cases which are sanctioned beyond three months of filing - regarding I am directed to invite your attention to provisions of section 11BB of Central Excise Act, 1944 that wherever the refund/rebate claim is sanctioned beyond the prescribed period of three months of filing of the claim, the interest thereon ....
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.... be made to the decision of this Court in Shreeji Colour Chem Industries (supra), relied upon by the Delhi High Court. It is evident from a bare reading of the decision that insofar as the reckoning of the period for the purpose of payment of interest under Section 11BB of the Act is concerned, emphasis has been laid on the date of receipt of application for refund. In that case, having noted that application by the assessee requesting for refund, was filed before the Assistant Commissioner on 12th January 2004, the Court directed payment of Statutory interest under the said Section from 12th April 2004 i.e. after the expiry of a period of three months from the date of receipt of the application. Thus, the said decision is of no avail to the revenue. 15. 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 the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. 11. In the case of Atmiya Engin....
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....contention is that they have granted the refund within three months form the date of Commissioner (Appeals) order. In this regard, I am of the view that once the Commissioner (Appeals) has allowed the refund, the appellant was entitled for the refund right from the date of filing of the application. Therefore, for the purpose of interest, it is not the date of Commissioner (Appeals) order, but it is the date of filing of refund application needs to be taken. 12. In the case of Tengapani Tea Estate, M/s. Betjan Tea Estate Vs. Commissioner of CGST & CX, Dibrugarh Commissionerate - 2021 (9) TMI 22, this Bench has held as under : "Since the claim for refund/exemption filed by the Appellants in 2008 was eventually adjudicated in favour of the Appellants in 2019, it is evident that there was a delay in the processing of the refund in favour of the Appellants. The Original Authority and the Appellate Authority have proceeded on the premise that the communication dated 27 February 2019 is a claim for refund, which is factually incorrect - The said communication dated 27 February 2019 by the Appellants is only forwarding and inviting the attention of the jurisdictional refund sa....
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....uring investigation and adjudication. In Riba Textiles, the Tribunal also granted interest at the rate of 12% on refund of amount deposited during investigation and at the time of entertaining the stay application. In view for the aforesaid decisions, and the fact that the rate of interest varies from 6% to 18% in the aforesaid Notifications issued under Sections 11AA, 11BB, 11DD and 11AB of the Excise Act, the grant of interest @ 12% per annum seems to be appropriate. Thus, for the reason stated above, Excise Appeal No. 70628 of 2019 is allowed and the order dated 28-5-2019, passed by the Commissioner (Appeals) is modified to the extent that interest shall be granted to the appellant @ 12% instead of @ 6% from the date of deposit till the date of payment. 16. In Churchit Interntional Vs CC (Export), vide Final Order No.58537/2024 dated 6.9.2024, the Delhi Tribunal has held as under : The Appellant was made to deposit Rs.50,00,000/- involuntarily under threat of arrest during investigation on 18.03.2014. Thereafter, Assistant Commissioner of Customs (Refund) vide Order-in-Original No.045/2021 dated 24/12/2021 allowed the refund of Rs.....