TMI Blog2021 (5) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... and interest, if any, paid on such duty by the applicant is refundable, he may make an order accordingly whereafter the amount is to be refunded. From a reading of section 11BB, it is evident that 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 section 11B, there shall be paid to that applicant interest at such rate which is not below 5% and not above 30% per annum as may be fixed by the central government, by notification in the Official Gazette. The interest will be calculated for the period commencing from the date immediately after expiry of three months from the date of receipt of such application till the date of refund of such duty. Petitioner would be entitled to interest under section 11BB of the Central Excise Act, 1944 on the amounts refunded to it. Respondent Nos.2 and 3 shall work out the interest amount payable to the petitioner in respect of the refund claims for the relevant periods which shall be paid to the petitioner within three months from the date of receipt of a copy of this judgment and order - Petition allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtracted hereunder:- Sr.No. Date of application Period Amount (Rs.) 1 29 June 2009 ( Refund Claim 1 ) June 2008 to September 2008 52,42,806.00 2 24 March 2010 ( Refund Claim 2 ) April 2009 to June 2009 84,06,204.00 3 29 June 2010 ( Refund Claim 3 ) July 2009 to September 2009 23,70,432.00 4 29 December 2010 ( Refund Claim 4 ) January 2010 to March 2010 62,37,040.00 5 29 March 2011 ( Refund Claim 5 ) April 2010 to September 2010 1,05,73,228.00 6 29 September 2011 ( Refund Claim 6 ) October 2010 to March 2011 88,71,458.00 7 13 March 2012 ( Refund Claim 7 ) April 2011 to September 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notices, petitioner submitted detailed replies enclosing therewith the requisite documents. 8. Refund sanctioning authority passed orders in original in respect of the refund claims made by the petitioner partially sanctioning the refund amount and partially rejecting the refund amount. Against the orders partially rejecting the refund claim, petitioner preferred appeals before the appellate authority. In those cases, appellate authority passed order in appeal allowing the refund claim of the petitioner whereafter orders in original were passed by the refund sanctioning authority. Details of the orders in original in respect of the refund claimed and refund sanctioned are extracted as under:- Refund Claim Period Refund claimed (Rs.) Order-in- Original No. and Date Refund amount sanctioned (Rs.) Refund Claim 1 June 2008 to September 2008 52,42,806.00 Refund/ES/58/10 dt.04.02.2010 52,42,806.00 Refund Claim 2 April 2009 to June 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,61,69,323.00 Refund-I/DK/08/2015-16 dt.24.04.2015 1,26,30,632.00 Refund Claim 12 Refund-ST/RSC/ 41/2018-19 dt.17.10.2018 31,47,669.00 Refund Claim 13 April 2013 to June 2013 29,14,376.00 Refund-I/DK/09/2015-16 dt.24.04.2015 26,72,813.00 Refund Claim 14 July 2013 to September 2013 50,49,493.00 Refund-I/DK/09/2015-16 dt.24.04.2015 44,54,937.00 Refund-ST/RY/35/2018-19 dt.07.09.2018 4,89,747.00 Refund Claim 15 October 2013 to December 2013 51,61,091.00 Refund-I/LSY/218/ 2015 dt.02.11.2015 25,58,859.00 Refund-ST/RSC/ 42/2018-19 dt.17.10.2018 22,27,103.00 Refund Claim 16 January 2014 to March 2014 1,69,48,954.00 Refund-I/LSY/219/ 2015 dt.02.11.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s letter of the petitioner dated 15.05.2017 and that the letter dated 02.05.2019 was only a sequitur to the earlier letter dated 15.05.2017. 10.1. Notwithstanding the above, petitioner again renewed the prayer for grant of interest on delayed refund vide letter dated 20.08.2019 followed by reminder dated 10.09.2019. However, petitioner has not received any communication from the office of respondent No.3. 11. Aggrieved, present writ petition has been filed seeking the relief as indicated above. 12. Respondent Nos.2 and 3 have filed a common reply affidavit through Shri. Milind Gawai, Principal Commissioner of Central Goods and Services Tax (CGST) and Central Excise, Mumbai East Commissionerate. At the outset an objection has been raised that petitioner has an alternative remedy of filing appeal before the Commissioner (Appeals) against the orders in original declining interest. Since petitioner has not availed the alternative remedy, petitioner may be relegated to the appellate forum for the reliefs sought for. 12.1. On merit it is stated that petitioner had filed refund applications and after scrutiny of the applications, the refund sanctioning authority had issued var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83 of the Finance Act, 1994, petitioner is entitled to interest as a matter of right for such delayed payment of refund. There is no question as to whether the delay caused in refund is intentional or not intentional. Besides referring to sections 11B and 11BB of the Central Excise Act, 1944 and circular dated 01.10.2002 of the Central Board of Excise and Customs, Mr. Shah has placed reliance on a number of decisions which he has furnished by way of a compilation. 14. On the other hand, Mr. Walve, learned counsel for the respondents has reiterated the averments made in the reply affidavit filed on behalf of respondent Nos.2 and 3 and asserts that there was no intentional delay in granting the refund to the petitioner. Therefore, question of payment of interest would not arise. As such, the writ petition should be dismissed. 15. Submissions made by learned counsel for the parties have received the due consideration of the Court. Also perused the judgments cited at the Bar. 16. Section 11B of the Central Excise Act, 1944 deals with claim for refund of duty and interest, if any, paid on such duty. Relevant portion of section 11B reads as under:- Section 11B. Claim for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Central Excise; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify : Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty and interest, if any, paid on such duty has not been passed on by the persons concerned to any other person. (3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls), 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. 17.1. From a reading of section 11BB as extracted above, it is evident that 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 section 11B, there shall be paid to that applicant interest at such rate which is not below 5% and not above 30% per annum as may be fixed by the central government, by notification in the Official Gazette. The interest will be calculated for the period commencing from the date immediately after expiry of three months from the date of receipt of such application till the date of refund of such duty. 18. We may also mention that section 83 of the Finance Act, 1994 makes it clear that pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason is cited. Wherever reasons are given, these are found to be very vague and unconvincing. In one case of consequential refund, the jurisdictional Central Excise officers had taken the view that since the Tribunal had in its order not directed for payment of interest, no interest needs to be paid. 2. In this connection, Board would like to stress that the provisions of section 11BB of Central Excise Act, 1944 are attracted automatically for any refund sanctioned beyond a period of three months. The jurisdictional Central Excise Officers are not required to wait for instructions from any superior officers or to look for instructions in the orders of higher appellate authority for grant of interest. Simultaneously, Board would like to draw attention to Circular No.398/31/98-CX, dated 2-6-98 [1998 (100) E.L.T. T16] wherein Board has directed that responsibility should be fixed for not disposing of the refund/rebate claims within three months from the date of receipt of application. Accordingly, jurisdictional Commissioners may devise a suitable monitoring mechanism to ensure timely disposal of refund/rebate claims. Whereas all necessary action should be taken to ensure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 11B failing which interest would have to be paid. Language of section 11B is very clear and unambiguous. It speaks of claiming refund of any duty of excise. No exception is provided. It does not distinguish or differentiate between any kind of excise duty refund, whether duty paid in excess or duty paid which are exempted. Reference was made to the decision of the Supreme Court in Ranbaxy Laboratories Limited (supra). 23. In a later judgment of the Supreme Court in Union of India Vs. Hamdard (Waqf) Laboratories, 2016 (333) ELT 193 , the decision in Ranbaxy Laboratories Limited (supra) was referred to and was concurred with. In the facts of that case it was held that it is obligatory on the part of the revenue to intimate the assessee to remove deficiency in the application if there are deficiencies within two weeks, and in any event if there are still deficiencies it can proceed with the adjudication and reject the application for refund; but the adjudicatory process by no stretch of imagination can be carried on beyond three months. It is required to be concluded within three months, failing which the statutory consequences mandated by section 11BB would come into play. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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