TMI Blog2022 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... nths from the date of receipt of application under sub- section (1), there shall be paid to the applicant interest 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. The relevant date, therefore, is the date on which the application for refund is filed. The decisions in COMMISSIONER OF C. EX., PUNE-III VERSUS BALLARPUR INDUSTRIES LTD. [ 2008 (7) TMI 94 - HIGH COURT BOMBAY] . M/S DABUR INDIA LIMITED VERSUS UNION OF INDIA AND 2 OTHERS [ 2016 (9) TMI 787 - ALLAHABAD HIGH COURT] and RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [ 2011 (10) TMI 16 - SUPREME COURT] emphasise that though the order granting refund may have been passed on a subsequent date but interest has to be paid after the expiry of three months from the date of filing of applications for refund. The Commissioner (Appeals) committed an illegality in construing 29.01.2020 as the date of filing of the refund application whereas the dates of filing of the refund applications were 30.03.2017, 20.06.2017, 31.07.2017 and 28.08.2017. On 29.01.2020 the appellant had merely submitted an application for implementation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms were rejected by the Assistant Commissioner by order dated 27.07.2018 on the ground that the services provided by the appellant were intermediary services and, therefore, did not qualify as export of service under Rule 6A of the Service Tax Rules, 1994. The appellant filed an appeal which was allowed by the Commissioner (Appeals) by order dated 25.09.2018 holding that the appellant would be entitled for refund of Rs. 19,60,52,917/-. This order was assailed by the Department before the Tribunal and the Tribunal by order dated 08.02.2019 set aside the order passed by the Commissioner (Appeals) and remanded the matter for passing a reasoned order after hearing the parties. 4. The Commissioner (Appeals) by order dated 18.03.2019 allowed the appeal filed by the appellant. This order was assailed by the Department before the Tribunal in Service Tax Appeal No. 51221 of 2019 which appeal was ultimately dismissed by the Tribunal by order dated 09.01.2020. 5. It is after the dismissal of the said appeal that the appellant wrote a letter dated 29.01.2020 to the Assistant Commissioner that the pending refund amount may be sanctioned at the earliest with the applicable interest. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicable rate on the already sanctioned amount at the rate specified in section 11BB after the expiry of three months from 29.01.2020 till the date of refund i.e. 28.09.2021. 7. The issue, therefore, that arises for consideration in this appeal is as to whether interest should be paid to the appellant after the expiry of three months from the date of filing of the four refund claims on 30.03.2017, 20.06.2017, 31.07.2017 and 28.08.2017 or it should be paid after the expiry of three months from 29.01.2020 on which date the appellant had merely made a request to the Department to grant refund pursuant to the order passed by the Tribunal on 09.01.2020. 8. Section 11BB of the Excise Act deals with interest on delayed refunds and it is reproduced below:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered. 12. It is not in dispute that the appellant had filed four refund applications and the details of these claims are as follows:- S. No. Period of Refund Claim Date of Refund claim 1. July 2016 to September 2016 30.03.2017 2. October 2016 to December 2016 20.06.2017 3. January 2017 to March 2017 31.07.2017 4. April 2017 to June 2017 28.08.2017 13. Initially, as noticed above, the applications were rejected by the Assistant Commissioner by order dated 27.07.2018 but the Commissioner (Appeals) finally granted refund by order dated 18.03.2019. This order was challenged by the Department before the Tribunal. The appeal filed by the Department was dismissed by the Tribunal on 09.01.2020. It is for implementation of this order that the appellant had filed an application before the Assistant Commissioner and the relevant portion of the application is reproduced below:- 4. The Ld. Commissioner (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. Manifestly, interest under Section 11BB of the Act becomes payable, it on an expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpretation of Section 11BB that can be arrived at is that interest under the said Section becomes payable on the expiry of a period of three months from the date of receipt of the application under Sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. Thus, the purpose of introducing explanation was to introduce deeming fiction that for the purpose of sub-section (2) of Section 11B if the order is made not by the Assistant Commissioner or Deputy Commissioner, but by the higher authorities, the order made by the higher authorities shall be deemed to be an order made by the Assistant Commissioner or Deputy Commissioner for the purpose of sub-section (2) of Section 11B of the Act. The explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. Interest under Section 11BB of the Act becomes 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 month ..... X X X X Extracts X X X X X X X X Extracts X X X X
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