2026-VIL-1595-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Interest on delayed refund - Relevant date for computing interest - Payment made under protest - Appellant was ordered to pay duty on coconut oil packed in small containers based on CBEC circular classifying such goods as cosmetics. Appellant filed writ petition and obtained interim stay. Appellant later registered and paid duty under protest and filed electronic refund claims. Hon'ble High Court allowed writ petition and held Circular ultra vires. Appellant subsequently filed formal refund claim in prescribed form and refund was sanctioned within three months. After four years appellant claimed interest under Section 11BB of CEA, 1944 from date of electronic claims - Whether claim for interest on refund is barred by limitation and delay and whether interest is to be calculated from date of electronic claims or subsequent formal claim - HELD - Payment of interest under Section 11BB is not dependent on claim by party and is a self-executing statutory obligation discharged suo motu by Department. Pendency of litigation does not postpone date from which interest runs under Section 11BB. Second proviso to Section 11B(1) contemplates that duty would sometimes be paid under protest because its leviability is disputed and such payment is protected independently by statute without regard to litigation pendency - Doctrine of laches and Limitation Act do not apply to self-executing statutory obligation cast on Department which Board has directed officers to discharge suo motu. Electronic claims filed without objection and without any deficiency memo constitute complete application from date of receipt. Insistence on subsequent physical claim in prescribed form was administrative preference not finding of documentary deficiency - Clause (ec) of Explanation to Section 11B governs limitation for filing claims not date from which interest runs. Department accepted protest payments and electronic claims without demur for several years and cannot subsequently claim benefit of its own silence and inaction - Interest is to be computed from electronic claims filed contemporaneously with protest payments - Order rejecting interest claim on ground of delay and laches is set aside. Appellant is entitled to interest under Section 11BB computed from date of electronic claims filed. Matter remitted to refund sanctioning authority to verify exact dates of receipt and compute interest at notified rate from expiry of three months from each such date until date of refund sanction – The appeal is allowed by remand
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