2026-VIL-1051-BOM-CE
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CENTRAL EXCISE High Court Cases

Central Excise - Statutory interest payable on refunds - Whether statutory interest under Section 11BB of CEA, 1944 accrues from the date of favourable appellate order or from the expiry of three months from the date of receipt of the original refund application under Section 11B of the Act - HELD - Section 11BB of CEA, 1944 Act comes into play only after an order for refund has been made under Section 11B of the Act. The provision provides that if duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application submitted under Section 11B, then the applicant shall be paid interest at the fixed rate on expiry of three months from the date of receipt of the application. The Explanation to Section 11BB introduces a deeming fiction regarding when an order is deemed made for purposes of this Section, but it has nothing to do with postponement of the date from which interest becomes payable. Interest under Section 11BB becomes payable on the expiry of three months from the date of receipt of the application under Section 11B of the Act and not from the date of the favourable order passed by the Appellate Tribunal or higher authority - A communication after the original application, even if styled as a reminder or continuation, cannot be construed as a fresh refund claim to reset the three-month period for interest accrual - Order denying statutory interest is quashed and set aside. Respondent directed to refund the amount alongwith statutory interest thereon till the date of actual refund – The writ petition is allowed
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