COMMISSIONER OF CENTRAL EXCISE Vs. BALLARPUR INDUSTRIES LTD.

JUDGEMENT

(1.) The facts that are material and relevant for deciding this appeal are that the Respondent M/s. Ballarpur Industries Ltd. is holder of central excise registration and is engaged in the manufacture of paper and paper board falling under CSH 48 of the first schedule to the Central Excise Tariff Act, 1985. The Respondent submitted an application under Section 11B of the Central Excise Act for refund of Excise duty paid by it. The claim of the Respondent for refund was rejected by the Assistant Commissioner of Central Excise and Customs by Order, dated, 5th May, 1998. The Respondent submitted second application for refund of Excise Duty under Section 11B of the Act to the tune of Rs. 24,00,925. That application for refund was also rejected by the Deputy Commissioner of Central Excise and Customs by Order, dated, 23rd March, 2000. They made third claim for refund under Section 11(b) of the Act for refund of Excise Duty to the tune of Rs. 62,96,976. That application was also rejected by Order, dated, 29th May, 1998. Being aggrieved by these Orders, the Respondent-company preferred an appeal before the Commissioner (Appeals), Central Excise, Pune. The Commissioner (Appeals), Central Excise, Pune by Order, dated, 10th February, 2003, set aside the Orders rejecting refund claim of Rs. 96,71,550 and Rs. 24,00,925. The Commissioner (Appeals) by another Order, dated, 7th February, 2003 set aside the Order rejecting refund of Rs. 62,96,976 and the Commissioner (Appeals) held, that the Respondent-company was entitled to refund of Excise Duty. Thereafter, the Respondent-company made a claim for interest under Section 11BB of the Act on the refunded amount. The Respondent-company was claiming interest from the date on which the period of three months expired from the date of receipt of application for refund under Section 11B of the Act till the date payment is deemed to have been made. The claim of interest was rejected by the Assistant Commissioner by Order, dated, 6th February, 2004. The Respondent - company filed appeal against that Order. That appeal was allowed by Order, dated, 23rd September, 2004 and the Appellate Authority held, that the Respondent-company was entitled to payment of interest under Section 11BB of the Act. That Order was challenged in the appeal by the department. That appeal has been rejected by the Tribunal by Order, dated, 11th December, 2006. The Tribunal has held, that the refund has to be made within three months from the date of filing of application for refund and not from the date on which Order is made directing the refund. The case of the department is that as the refund was made within the period of three months from the date of the Order passed by the Appellate Authority sanctioning the refund, no interest under Section 11BB of the Act is payable.

(2.) For considering this appeal, the substantial question of law which, according to the learned Counsel appearing for Appellant, arises is "Whether the Tribunal was justified in holding that interest is payable under Section 11BB of the Act. According to the learned Counsel, interest under Section 11BB of the Act is payable only when an Order for refund is made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise. He relied on the provisions of Sub-section (2) of Section 11B of the Act in support of his submission.

(3.) On the other hand the learned Counsel appearing for Respondent relying on the explanation appearing below Section 11BB of the Act submits that interest is payable even if refund is Ordered not by the Order made by the Assistant Commissioner or Deputy Commissioner, but if the refund is Ordered either by the Appellate Authority or Tribunal or Court.