TMI Blog2009 (5) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... r was carried in appeal before this Tribunal vide its order dated 29-12-1998, the orders passed by the lower authorities were quashed and set aside. Meanwhile, the appellants had to deposit a sum of Rs. 1,31,00,000/- in the course of the said proceedings in order to get stay of the execution of the order passed by the adjudicating authority. Consequent to the quashing of the said demand the Tribunal by its order dated 29-12-1998 [2003 (159) E.L.T. 1187 (Tri.-Del.)], the appellants claimed refund of the said amount of Rs. 1,31,00,000/- by a refund application dated 23-2-2001. The Department vide order dated 11th April, 2000 allowed the application for refund of Rs. 1,31,00,000/- but did not order payment of interest even though there was delay in refunding amount. Under letter dated 3rd July 2000 addressed to the Deputy Commissioner, the appellants demanded the amount of interest to the tune of Rs. 28,16,579/- for a period from 23-5-99 to 13-4-2000 on the said amount of Rs. 1,31,00,000/-. The said letter was followed by the reminders dated 13-7-2000, 6-10-2000, 2-12-2000, 16-1-2001, 27-1-2001, 11-7-2001 and 10-8-2001. The Deputy Commissioner by his order dated 6th August, 2001 rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide by the order of the Tribunal on 29-12-1998. Undisputedly, the appellants thereafter, preferred an application dated 23-2-1999 claiming refund of the said amount of Rs. 1,31,00,000/-. Undoubtedly, the amount of Rs. 1,31,00,000/- belonged to the appellants and the department had no right to retain the same. However, it was not refunded to the appellants till 11-4-2000. At the same time, it is also not in dispute that the department had preferred a reference application against the order dated 29-12-1998 which came to be disposed of on 19-1-2000. Equally, it is true that it is not in dispute that the amount of Rs. 1,31,00,000/- was refundable to the appellants consequent to the order passed by the Tribunal on 29-12-1998 as there was no demand for duty pending against the appellants, subsequent to the said order of the Tribunal. 8. The question, therefore, arises is as to whether filing of the reference application against the order dated 29-12-1998 would automatically result in stay of refund claim in relation to the amount which was deposited by the appellants for obtaining stay of the order dated 24-9-1996. Section 11BB of the Central Excise Act, 1944, clearly provides that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of receipt of application required to be made under Section 11B(1). The rate of interest is to be prescribed by the Board and the interest is payable with effect from the date commencing from the expiry of three months from the date of receipt of such application till the refund of such duty. 12. Similarly, the Allahabad High Court in Hamdard (Wakf) Laboratories v. UOI referring Section 11BB of the said Act held thus :- 6. From a bare reading of the provisions of Section 11BB of the Act, we find that the legislature by the aforesaid provision has cast a duty upon the adjudicating authority to decide the claim for refund immediately within three months failing which the liability for interest start running after excluding the period of three months from the date of the application. Admittedly, in the present case, it is not in dispute that the claim for refund was made on 25th August, 1999 whereas the order for refund has been passed on 16th November, 2000. Under the provision of Section 11BB of the Act, interest start running after three months from the date of the application irrespective of the fact as to whether the order for refund has been made subsequent to the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payable on expiry of period of three months from the date of the receipt of the application for refund if the amount is not refunded within three months from the date of receipt of the application. The learned Counsel appearing for respondent also relied in support of his submission on the judgments of various High Courts. However, in our opinion, the position of law is absolutely clear that the interest is payable under Section 11BB of the Act on expiry of period of three months from the date of receipt of the application and that Explanation appearing below Section 11BB of the Act does not have any effect or connection with the date from which interest under Section 11BB of the Act becomes payable. The only purpose served by the explanation, as observed above, is to introduce a deeming fiction which is relevant for the purpose of sub-section (2) of Section 11B of the Act. 14. It is also to be noted that the efforts on the part of the department to challenge the order passed by the Rajasthan High Court in J.K. Cement Works proved futile as the Special Leave to Appeal (Civil) No. 21547 of 2004 was dismissed by the Apex Court by order dated 10-2-2004 [2005 (179) E.L.T. A150 (S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re has to be an executable order passed by the lower authority demanding duty or interest or penalty. The amount of Rs. 1,31,00,000/- was deposited by the appellant in order to avail the order of stay of the demand of duty during the pendency of the appeal before the Tribunal. The order of the adjudicating authority and that of the Commissioner (Appeals) demanding duty were set aside by the Tribunal and it was against such order of the Tribunal that the reference application was filed. Being so, the order of the Tribunal setting aside the order demanding the duty cannot be said to be an executable order. In these circumstances, therefore, it cannot be said that the department was entitled to retain the said amount. 18. The authority below having totally ignored the mandate of Section 11BB, the order dated 6-8-2001 by the Additional Commissioner and the order dated 27-7-2004 by the Commissioner (Appeals) in the matter in hand as far as they relate to refusal of demand of interest cannot be sustained and are to be set aside and the department is to be held liable to pay interest to be calculated in terms of provisions comprised under Section 11BB bearing in mind the above referred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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