CESTAT Applies 6% Interest U/S 11BB Of Central Excise Act
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has said that curiosity on delayed refund is statutorily mandated after 3 months below Part 11BB Of Central Excise Act.
Part 11BB of the Central Excise Act, 1944 mandates that if a responsibility refund just isn’t processed inside three months from the receipt of an utility, the applicant is entitled to curiosity on the delayed quantity. It empowers Central Authorities to repair price between 5-30% by way of notification. Notification 67/2003 validly issued fixing 6% price.
The Bench of Dr. Rachna Gupta (Judicial Member) has noticed that “the refund utility was of 06.09.2017 and the order sanctioning the identical is dated 23.02.2021 apparently the order of sanction is far past the mentioned interval of three months. That is enough to conclude that the assessee is entitled for curiosity on the quantity of refund declare. Nonetheless, with impact from the date on which the three months from the date of refund expires until the date of disbursement thereof.”
That assessee/appellant had utilized a refund declare for refund in money of whole gathered Cenvat. On verification of the refund declare, it was noticed that there aren’t any provisions for such refund.
Accordingly, Assistant Commissioner issued a Present Trigger Discover to the claimant proposing disallowance of the refund declare. After following the process of pure justice, the Assistant Commissioner rejected the refund declare. The Commissioner (Appeals) additionally dismissed the attraction. The attraction towards the mentioned order has been allowed vide the Closing Order of the Tribunal.
Since the division filed an attraction towards the mentioned closing order earlier than the Madhya Prasdesh Excessive Courtroom, that the declare was proposed to be rejected vide Present Trigger Discover on seven grounds as talked about within the mentioned present trigger discover.
Nonetheless, the proposal was not accepted, and the quantity of refund declare was sanctioned as nicely as disbursed vide the order-in-original.
Since the curiosity when it comes to Part 11BB of Central Excise Act was not granted whereas sanctioning the mentioned refund that the attraction was filed earlier than Commissioner (Appeals) who vide the order has dismissed the attraction because of the pendency of Writ Petition.
The assessee contended that the attraction of the division towards the ultimate order dated 26.04.2019 earlier than Excessive Courtroom stands already disposed of being “Dismissed as Withdrawn” vide order dated 23.07.2025. Accordingly, the one foundation for the order of Commissioner (Appeals) is not any extra in existence. The assessee is in any other case entitled for the curiosity when it comes to Part 11BB of Central Excise Act.
The Tribunal famous that as per Part 11BB the statute itself entitles the assessee to have curiosity on the quantity refunded in case the mentioned quantity just isn’t sanctioned inside three months of the refund declare.
The Tribunal additional noticed that Part 11BB has given a variety of such price which shouldn’t be beneath 5% and shouldn’t be exceeding 30% topic to a notification within the official gazette.
The notification dated 12.09.2003 has fastened the mentioned price at 6%. Resultantly, the assessee entitled for the curiosity for the interval as already talked about above @ 6%, added the bench.
In view of the above, the Tribunal allowed the attraction.
Case Title: Bharat Heavy Electricals Restricted v. Commissioner of CGST & Central Excise, Bhopal
Case Quantity: Excise Attraction No. 55256 of 2023
Counsel for Appellant/ Assessee: Z.U. Alvi
Counsel for Respondent/ Division: Kuldeep Rawat
