TMI Blog2024 (2) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... d claim. It is therefore obvious that what clause (ec) of Section 11B refers to, is only to enhance the limitation period, to a case where the duty becomes payable as a result of an order of the court or a direction from the appellate authority - there are no merit in the said interpretation of the learned Commissioner (Appeals). The Hon ble Gujarat High Court in the case of Kamakshi Tradexim (India) Pvt. Ltd. Vs. Union of India [ 2017 (4) TMI 223 - GUJARAT HIGH COURT] . clearly held that the liability of the department to pay interest in terms of Section 11BB, of the Central Excise Act commences from date of expiry of three months from the date of receipt of application for refund under Section 11B(i) of the act ibid - It is found that appellant is entitled to payment of interest, three months from the date of the refund application made by them. The appeal filed by the assessee/appellant is allowed, who shall be entitled for payment of interest three months from the date of refund applications - the order of the lower authority is set aside - Appeal allowed. - HON BLE MR. R. MURALIDHAR MEMBER ( JUDICIAL ) And HON BLE MR. RAJEEV TANDON MEMBER ( TECHNICAL ) For the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund for a delay of 1853 days and 1071 days respectively, claiming that they were entitled to interest on delayed refund under Section 11 BB of the Central Excise Act, 1944, commencing from the date of expiry of three months from the date of filing of the refund application before the Hon ble Assistant Commissioner. The appellant relied on the law as enunciated by the apex court in the case of Ranbaxy Laboratories Ltd. Vs. Union of India 2011 (273) ELT 3 (S.C) , as well as that laid down by the Hon ble Allahabad High Court in the case of Twiga Fiber Glass Ltd. Vs. UOI 2008 (229) ELT 205 (All.) , in support of their claim. It is therefore the contention of the appellant that their request letter dated 14 January 2013 cannot be considered as a fresh refund claim and the same cannot be read in connection to clause (ec) inserted below Explanation B of Section 11B of the Central Excise Act, 1944. They state that the learned Deputy Commissioner had rejected their claim of interest on delayed refund quoting the aforementioned clause (ec) that was inserted below Explanation B to Section 11 B of Central Excise Act with effect from 11.05.2007. The relevant extract of the said order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of (ec) explanation to Section 11B to Section 11BB. What Section 11B (5) (ec) does is that it only expands the date of filing refund claim which would have otherwise been lost due to various sub- causes of Section 11B(5). For example, an assessee become entitled to a refund following a classification dispute but finds that a period of one year has already elapsed from the date or payment of duty [sub clause (f) of 11(5)]. Then clause (ec) saves him by giving an extended period of filing the refund claim from the date of judgment, decree, order or direction. But this provision does not take away the rigor of Section 11BB regarding payment of interest. In this case department's view that refund claim has been filed only after the order of Commissioner (Appeal) and there is no delay in sanctioning the refund claim is not correct as no refund claim was filed after the order of Commissioner (Appeal). 3. To examine the issue, it would therefore be necessary to consider the law as it stood at the relevant point in time. 11B- Claim for refund of duty and interest, if any, paid on such duty- (1) Any person claiming refund of any duty of excise and interest, if any, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . (4) (5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette. [Explanation. - For the purposes of this section,- (A) refund includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (B) relevant date means,- (a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods, (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or (ii) if the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 subsection (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 section from the date immediately after three months from such date, till the date of refund of such duty. 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), 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. 4. To examine the issue, it is necessary to place on record what the hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax- (2010) 8 SCC 739]. 11. At this juncture, it would be apposite to extract a Circular dated 1st October 2002, issued by the Central Board of Excise and 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 prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded by the decision of this Court in U.P. Twiga Fiber Glass Ltd. (supra). In the said case, while dismissing the special leave petition filed by the revenue and putting its seal of approval on the decision of the Allahabad High Court, this Court had observed as under: Heard both the parties. In our view the law laid down by the Rajasthan High Court succinctly in the case of J.K. Cement Works Vs. Assistant Commissioner of Central Excise Customs reported in 2004 (170) ELT 4 vide Para 33 : A close reading of Section 11BB, which now governs the question relating to payment of interest on belated payment of interest, makes it clear that relevant date for the purpose of determining the liability to pay interest is not the determination under sub-section (2) of Section 11B to refund the amount to the applicant and not to be transferred to the Consumer Welfare Fund but the relevant date is to be determined with reference to date of application laying claim to refund. The non-payment of refund to the applicant claimant within three months from the date of such application or in the case governed by proviso to Section 11BB, non-payment within three months from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. 6. We are afraid that we cannot bring ourselves to terms to accept the aforesaid interpretation in law as canvassed by the learned Commissioner (Appeals). We are of the view that the incorporation of clause (ec) is to be construed only to the extent of expanding the limitation permitted for purpose of staking a claim for refund. The said provisions serves no other purpose and no other meaning can flow out of the same and the insertion of the said clause in law does not in any way seeks to alter the findings of the apex court, permitting payment of interest upon expiry of a period of three months from the date of receipt of the application for refund. 7. We are of the view that a harmonious reading of the two provisions of the Central Excise Act viz. Section 11B alongwith Section 11BB is required to be undertaken, in the present context, which the learned Authority failed to take cognizance of. Thus viewed, Section 11BB is concerned with payment of interest on delayed refunds. It specifically caters to a scenario where the duty ordered to be refunded in terms of Section 11B, becomes payable as a result of an appellate proceeding, is not refunded within three month ..... X X X X Extracts X X X X X X X X Extracts X X X X
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