Excise – New Delhi High Court: Appellant succeeds for the claim of refund before the Appellate Authorities, interest is required to be calculated from the date immediately after the expiry of three months from the date of application for the refund and not from the date of the appellate orders – Writ petition allowed [Order attached]
Order Date – 03 August 2023
Parties: Blackberry India Pvt Ltd Vs The Assistant Commissioner, Central Excise and CGST Division, Malaviya Nagar, New Delhi
- The Petitioner, Blackberry India Pvt Ltd, made refund applications for unutilised Cenvat Credit on 28.03.2013, 31.03.2014, 30.06.2014 which were initially rejected on 31.08.2020.
- On an appeal filed by the petitioner the refund was sanctioned on 07.12.2022. As the refund was not processed immediately, the petitoner sent a letter dated 07.02.2023 seeking refund along with interest.
- The refund was processed but denied the interest on the said amount, on the ground that the refund has been sanctioned within a period of three months from the receipt of its letter dated 07.02.2023, as contemplated under Section 11BB of the Excise Act read with Section 83 of the Finance Act.
- Whether the petitioner is entitled to interest on refund?
- The Divisional Bench of Hon’ble High Court observed that where Revenue denies the claim for refund and the assessee succeeds before the Appellate Authorities, the interest is required to be calculated from the date immediately after the expiry of three months from the date of application for the refund and not from the date of the appellate orders.
- This issue was settled by the Supreme Court in Ranbaxy Laboratories Ltd. v. Union of India: (2011) 10 SCC 292. The Adjudicating Authority has erred in holding that the petitioner’s letter dated 07.02.2023, requesting for processing its claims for refund is to be considered as its application for refund.
- It is clear that the petitioner had filed its applications of refund on 28.03.2013, 31.03.2014 and 30.06.2014 for the tax periods April-June 2012, April-June 2013, and July-September 2013 respectively, however, the Adjudicating Authority has failed to consider the same. And the interest payable to the petitioner is required to be calculated from the date immediately after expiry of three months from the dates on which those applications were made.
- The writ petition is allowed and the Adjudicating Authority is directed to forthwith process the petitioner’s claim of interest under Section 11BB of the Excise Act read with Section 83 of the Finance Act.