M/S. Tribeni Metalloys PVT. LTD. vs. The Union Of INDIA And 2 Ors

Held

The Court held that the petitioner is entitled to interest under Section 11BB of the Central Excise Act, 1944, on the belatedly refunded excise duty. The Court reasoned that Section 11B of the Act does not exclude claims for refund made in terms of exemption notifications. Conjointly reading Sections 11B and 11BB, the Court found that if a refund ordered under Section 11B(2) is not made within three months of the application receipt, interest is payable. This principle was reinforced by the Supreme Court in Ranbaxy Laboratories Ltd. vs. Union of India, which clarified that the liability to pay interest commences from the expiry of three months from the date of receipt of the refund application. The Court explicitly followed its own Division Bench judgment in Amalgamated Plantations (P) Ltd. vs. Union of India. The jurisdictional excise officers were directed to determine the interest amount payable to the petitioner for the relevant periods and pay it within three months from the date of the order.

Facts

The petitioner, M/s. Tribeni Metalloys Pvt. Ltd., sought a direction from the Gauhati High Court for the Assistant Commissioner of GST and Central Excise to pay interest on the delayed refund of central excise duty. The petitioner, an industrial unit in Assam, claimed excise duty exemption under specific government notifications. Despite this, excise duty was levied for the periods from July 8, 1999, to March 2000, April 2000 to March 2001, and April 2001 to January 2002. Following a court order, the excise duty was refunded on November 1, 2018. The petitioner contended that interest was payable on this delayed refund as per Section 11BB of the Central Excise Act, 1944.

Key Issues

1. Whether the petitioner is entitled to interest under Section 11BB of the Central Excise Act, 1944, on the delayed refund of central excise duty, notwithstanding that the refund was claimed under exemption notifications? Petitioner's Argument: The petitioner argued that Section 11BB of the Central Excise Act, 1944, mandates payment of interest on delayed refunds, and there is no exception for refunds made under exemption notifications. They relied on the principle that fiscal legislation must be strictly construed and nothing should be implied. They also cited the Supreme Court's decision in Ranbaxy Laboratories Ltd. vs. Union of India and a Division Bench judgment of the Gauhati High Court in Amalgamated Plantations (P) Ltd. vs. Union of India. Revenue's Argument: The judgment records that the learned counsel for the parties were in agreement that the issue was covered by the Division Bench judgment of the Gauhati High Court in Amalgamated Plantations (P) Ltd. Therefore, no separate argument was recorded for the revenue on this specific point.