Commissioner Of GST And Central Excise vs. M/S S. Gopal And Company

Held

The Court held that the issue regarding the Revenue's liability to pay interest on delayed payment of refund under Section 11BB of the Central Excise Act, 1944, was no longer res integra, citing the Supreme Court's decision in Ranbaxy Laboratories Limited. This decision clearly established that the liability commences from the expiry of three months from the date of receipt of the refund application, not from the date of the refund order. The Court noted that it had previously decided similar cases in favour of assessees, affirming CESTAT judgments. Consequently, the appeal filed by the Revenue was dismissed. However, to account for the pending SLP in M/s Dharampal Satyapal Limited, the Court directed the respondent-assessee to furnish an undertaking to reimburse the interest amount if the Revenue were to succeed in that SLP. The Revenue was directed to pay the interest within two months from the date of the order.

Facts

The Commissioner of GST and Central Excise, Dibrugarh, appealed against a judgment of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata. The CESTAT had allowed the respondent-assessee, M/s S. Gopal and Company, to claim interest on delayed payment of refund under Section 11BB of the Central Excise Act, 1944. The CESTAT directed the Revenue to pay interest within two months from the receipt of its order, commencing three months after the filing of the refund application. The appellant's sole submission was that the issue of interest entitlement was pending before the Supreme Court in the case of M/s Dharampal Satyapal Limited. However, the appellant could not dispute the Supreme Court's ruling in Ranbaxy Laboratories Limited, which established that interest liability commences three months after the refund application is received.

Key Issues

1. Whether the Revenue is liable to pay interest on delayed refund under Section 11BB of the Central Excise Act, 1944, and if so, from what date. Petitioner's Argument: The petitioner (Revenue) argued that the issue regarding the entitlement to interest on delayed refund under Section 11BB of the Central Excise Act, 1944, was pending consideration before the Hon'ble Supreme Court in the case of M/s Dharampal Satyapal Limited. Therefore, a final decision on this matter was awaited. Respondent's Argument: The respondent (assessee) contended that the liability of the Revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of the application for refund under Section 11B(1) of the Act, as clearly laid down by the Hon'ble Supreme Court in Ranbaxy Laboratories Limited -Vs- Union of India & Ors. They argued that this issue was no longer res integra.