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whether 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 application for refund or on the expiry of the said period from the date on which the order of refund is made? =In view of the above analysis, our answer to the question formulated in para (1) supra is that the liability of the revenue to pay interest under Section 11BB of the Act 16

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                                                            REPORTABLE

                  IN THE SUPREME COURT OF INDIA

                  CIVIL APPELLATE JURISDICTION

                  CIVIL APPEAL NO. 6823 OF 2010

 RANBAXY LABORATORIES LTD.                       --    APPELLANT

                                 VERSUS

 UNION OF INDIA & ORS.                           --    RESPONDENTS

                                  WITH 

                  CIVIL APPEAL NO. 7637 OF 2009

                                   AND

                  CIVIL APPEAL NO. 3088 OF 2010

                              JUDGMENT

D.K. JAIN, J.:

1. The   challenge   in   this   batch   of   appeals   is   to   the   final 

   judgments and orders delivered by the High Court of Delhi in 

   W.P.   No.13940/2009   and   the   High   Court   of   Judicature   at 

   Bombay   in   Central   Excise   Appeal   Nos.163/2007   and   124   of 

   2008.   The core issue which confronts us in all these appeals 

   relates   to  the  question  of  commencement  of  the  period    for 

                                                                            1

   the   purpose   of   payment   of   interest,   on   delayed   refunds,   in 

   terms   of   Section   11BB   of   the   Central   Excise   Act,   1944     (for 

   short   "the   Act").       In   short,   the   question   is   whether   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   application   for   refund   or   on   the 

   expiry of the said period from the date on which the order of 

   refund is made?

2. As aforesaid, in all these appeals the question in issue being 

   the   same,   these   are   being   disposed   of   by   this   common 

   judgment. However, in order to appreciate the controversy in 

   its proper perspective, a few facts from C.A. No. 6823 of 2010  

   may be noted. These are as follows:

      The   appellant   filed   certain   claims   for   rebate   of   duty, 

amounting   to   Rs.4,84,52,227/-   between   April   and   May   2003. 

However,   the   Assistant   Commissioner   of   Central   Excise,   vide 

order dated 23rd  June 2004, rejected the claim.   Aggrieved, the 

appellant   filed   an   appeal   before   the   Commissioner,   Central 

Excise (Appeals), who by his order dated 30th  September 2004 

allowed   the   appeal   and   sanctioned   the   rebate   claim.   Being 

                                                                                   2

aggrieved by the said order, the revenue filed an appeal before  

the   Joint   Secretary,   Government   of   India,   Ministry   of   Finance, 

but   without   any   success.   Ultimately   rebate   was   sanctioned   on 

11th January, 2005. On 21st April 2005, appellant filed a claim for 

interest   under   Section   11BB   of   the   Act   on   account   of   delay   in 

payment of rebate. 

3.    A   show   cause   notice   was   issued   to   the   appellant   on   5th  July 

      2005,   proposing   to   reject   their   claim   for   interest   on   the 

      ground that rebate had been sanctioned to them within three 

      months of the receipt of order of the Commissioner (Appeals) 

      dated  30th September, 2004. Upon consideration of the reply 

      submitted by the appellant, relying on Explanation to Section 

      11BB   of   the   Act,   the   Assistant   Commissioner   rejected   the 

      claim.

4.    Against the said order,  the appellant filed an appeal  before 

      the   Commissioner   (Appeals).   The   Commissioner   (Appeals) 

      allowed the appeal and directed the Assistant Commissioner 

      to compute and pay the interest to the appellant. Aggrieved 

      by   the   said   direction,   the   Assistant   Commissioner   filed   an 

      appeal before the Customs, Excise and Service Tax Appellate 

                                                                                    3

      Tribunal  (for short `the Tribunal').  However,  the  appeal  was 

      dismissed by the Tribunal on the ground that it did not have 

      jurisdiction to deal with a rebate claim.   Feeling aggrieved, 

      the   Assistant   Commissioner   filed   a   revision   application 

      before the Joint Secretary, Ministry of Finance, Govt. of India 

      who   vide   his   order   dated   30th  July   2009   set   aside   the   order 

      passed   by   the   Commissioner   (Appeals)   and   held   that   the 

      appellant   was   not   entitled   to   interest   under   Section   11BB   of 

      the Act.

5.      Being  dissatisfied  with  the  said  order,  the  appellant  filed  a 

      writ   petition   in   the   High   Court   of   Delhi.   Relying   on   the 

      decision   of   this   Court   in  Union   of   India   &   Anr.  Vs.  Shreeji  

      Colour Chem Industries1, by the impugned order, the High 

      Court has affirmed the decision of the revisional authority and 

      held that the appellant is not entitled to interest under Section 

      11BB  of  the  Act.    Hence,   in  the   lead   case  the   assessee  is  in 

      appeal   before   us.     However,   in   the   connected   appeals,   the 

      High   Court   of   Judicature   at   Bombay   having   affirmed   the 

      decisions of the Tribunal, upholding the claim of the assessee 

1 (2008) 9 SCC 515

                                                                                    4

      for interest under Section 11BB of the Act, the revenue is the 

      appellant.

6.    Learned  counsel  appearing  for the  assessee  contended  that 

      the language of Section 11BB of the Act is clear and admits  of 

      no ambiguity,  in as much as the revenue  becomes  liable to  

      pay interest at the prescribed rate on refunds on the expiry of 

      three   months   from   the   date   of   receipt   of   application   under 

      Section 11B(1) of the Act and such liability  continues till the 

      refund  of  duty.   Learned  counsel  urged that reliance  on the 

      decision   of   this   Court   in  Shreeji   Colour   Chem   Industries 

      (supra)   by   the   Delhi   High   Court   in   rejecting   the   claim   for 

      interest is misplaced. It was contended that the said judgment 

      deals   with   two   kinds   of   interest,  viz.  (i)   equitable   interest 

      because of delayed refunds and (ii) statutory interest payable 

      under   Section   11BB   of   the   Act.     According   to   the   learned  

      counsel   in   terms   of   the   latter,   the   judgment   supports   the 

      assessee's claim, but the High Court has erroneously applied 

      the   principle   laid   down   for   payment   of   equitable   interest. 

      According   to   the   learned   counsel,   the   said   decision   clearly 

      holds   that   an   assessee   is   entitled   to   interest   under   the   said 

      Section   after   the   expiry   of   three   months   from   the   date   of 

                                                                                     5

    receipt of application for payment of refund.  In support of the 

    claim,   learned   counsel   commended   us   to   the   order   passed 

    by  this Court in  Union of India  Vs.  U.P. Twiga Fiber Glass  

    Ltd.2,  whereby the appeal preferred by the revenue against 

    the decision of the Allahabad High Court has been dismissed. 

    In  the  said  decision,   following  the   decision  of   the  Rajasthan 

    High   Court   in               J.K.   Cement   Works       Vs.     Assistant  

    Commissioner of Central Excise & Customs3, the Allahabad 

    High Court had held that the relevant date for the purpose of 

    determining the liability to pay interest under Section 11BB of 

    the   Act   is   with   reference   to   the   date   of   application,   laying 

    claim   for   refund   and   not   the   actual   determination   of   refund 

    under Section 11B(2) of the Act. To bolster the claim, learned 

    counsel placed strong reliance on a number of Circulars on 

    the point, issued by the Department of Revenue, Ministry  of 

    Finance,   Govt.   of   India,   clarifying   that   with   the   insertion   of 

    new   Section   11BB   of   the   Act,   the   department   had   become 

    liable   to   pay   interest   under   the   said   Section   if   the   refund 

    applications   were   not   processed   within   three   months   from 

    the date of receipt of refund applications.

2 2009 (243) E.L.T. A27 (S.C.).

3 2004 (170) E.L.T. 4

                                                                                  6

7. Mr. Arijit Prasad, learned counsel appearing for the revenue, 

  on the other hand, submitted that since in the present cases 

  no refunds were sanctioned under Section 11B of the Act, the 

  provisions of Section 11BB of the Act were not attracted.    In 

  the alternative, it was submitted that the refund orders having 

  been sanctioned within three months of the passing of orders 

  by   the   appellate   authority,   interest   under   the   said   Section 

  was not payable.

8. Before evaluating the rival contentions, it would be necessary 

  to refer to the relevant provisions of the Act.   Section 11B of 

  the Act deals with claims for refund of duty.  Relevant portion 

  thereof reads as under: 

     "11B.Claim   for   refund   of   duty.-(1)   Any   person 

     claiming refund of any duty of excise and interest, if 

     any, paid on such duty may make an application for 

     refund of such duty and interest if any, paid on such 

     duty to the Assistant Commissioner of Central Excise 

     or   Deputy   Commissioner   of   Central   Excise   before 

     the expiry of one year from the relevant date in such 

     form   and   manner   as   may   be   prescribed   and   the 

     application   shall   be   accompanied   by   such 

     documentary   or   other   evidence   including   the 

     documents   referred   to   in   section   12A   as   the 

     applicant may furnish to establish that the amount of 

     duty of excise  and interest, if any, paid on such duty 

     in   relation   to   which   such   refund   is   claimed   was 

     collected from or paid by him and the incidence of 

                                                                            7

such duty and interest if any, paid on such duty had 

not been passed on by him to any other person:

Provided  that   where   an   application   for   refund   has 

been made before the commencement of the Central 

Excises and Customs Laws (Amendment) Act, 1991, 

such   application   shall   be   deemed   to   have   been 

made under this sub-section as amended by the Act 

and the same shall be dealt with in accordance with 

the   provisions   of   sub-section   (2)   as   substituted   by 

that Act:

Provided further that the limitation of one year shall 

not   apply   where   any   duty   has   been   paid   under 

protest. 

(2)   If,   on   receipt   of   any   such   application,   the 

Assistant Commissioner of Central Excise or Deputy 

Commissioner of  Central  Excise is satisfied that  the 

whole or any part of the duty of excise and interest, if 

any,   paid   on   such   duty   paid   by   the   applicant   is 

refundable, he may make an order accordingly and 

the   amount   so   determined   shall   be   credited   to   the 

Fund:

Provided  that   the   amount   of   duty   of   excise   and 

interest,   if   any,   paid   on   such   duty   of   excise   as 

determined   by   the   Assistant   Commissioner   of 

Central   Excise   or   Deputy   Commissioner   of   Central 

Excise   under   the   foregoing   provisions   of   this   sub-

section shall, instead of being credited to the Fund, 

be paid to the applicant, if such amount is relatable 

to-----

      (a)    rebate   of   duty   of   excise   on 

             excisable   goods   exported   out   of 

             India   or   on   excisable   materials 

             used   in   the   manufacture   of   goods 

             which are exported out of India;

      (b)    unspent advance deposits lying in 

             balance   in   the   applicant's   current 

                                                                       8

              account   maintained   with   the 

              Commissioner of Central Excise;

       (c)    refund   of   credit   of   duty   paid   on 

              excisable  goods used as inputs in 

              accordance   with   the   rules   made, 

              or   any   notification   issued,   under 

              this Act;

       (d)    the   duty   of   excise   and   interest,   if 

              any, paid on such duty paid by the 

              manufacturer, if he had not passed 

              on the incidence of such duty and 

              interest,  if  any,  paid  on  such duty 

              to any other person;

       (e)    the   duty   of   excise   and   interest,   if 

              any,   paid   on   such   duty   borne   by 

              the buyer, if he had not passed on 

              the   incidence   of   such   duty   and 

              interest,  if  any,  paid  on  such duty 

              to any other person;

       (f)    the   duty   of   excise   and   interest,   if 

              any,   paid   on   such   duty   borne   by 

              any  other  such class  of  applicants 

              as   the   Central   Government   may, 

              by   notification   in   the   Official 

              Gazette, specify :

Provided  further that no notification under clause (f) 

of   the   first   proviso   shall   be   issued   unless   in   the 

opinion of the Central Government, the incidence of 

duty and  interest,  if any,  paid  on such duty has not  

been   passed   on   by   the   persons   concerned   to   any 

other person.

(3)   Notwithstanding   anything   to   the   contrary 

contained   in   any   judgment,   decree,   order   or 

direction   of   the   Appellate   Tribunal   of   any   Court   in 

any   other   provision   of   this   Act   or   the   rules   made 

thereunder   or   any   other   law   for   the   time   being   in 

                                                                         9

     force, no refund shall be made except as provided in 

     sub-section (2).

     (4)     .................................................................

     (5)     ................................................................"

Section 11BB, the pivotal provision, reads thus:

     "11BB.  Interest on delayed refunds.- 

     If   any   duty   ordered   to   be   refunded   under   sub-

     section   (2)   of   section   11B   to   any   applicant   is   not 

     refunded   within   three   months   from   the   date   of 

     receipt   of   application   under   sub-section   (1)   of   that 

     section, there shall be paid to that applicant interest 

     at   such   rate, not   below   five   per   cent   and   not 

     exceeding   thirty   per   cent   per   annum   as   is   for   the 

     time   being   fixed by   the   Central   Government,   by 

     Notification in the Official Gazette, on such duty from 

     the   date   immediately   after   the   expiry   of   three 

     months  from the  date of  receipt of  such application 

     till the date of refund of such duty : 

     Provided   that   where   any   duty   ordered   to   be 

     refunded   under   sub-section   (2)   of   section   11B   in 

     respect   of   an   application   under   sub-section   (1)   of 

     that   section   made   before   the   date   on   which   the 

     Finance   Bill,   1995   receives   the   assent   of   the 

     President, is not refunded within three months from 

     such   date,   there   shall   be   paid   to   the   applicant 

     interest under this section from the date immediately 

     after   three   months   from   such   date,   till   the   date   of 

     refund of such duty.

     Explanation : Where any order of refund is made by 

     the Commissioner (Appeals), Appellate Tribunal   or 

     any   Court   against   an   order   of   the   Assistant 

     Commissioner   of   Central   Excise,   under   sub-section 

     (2)   of   section   11B,   the   order   passed   by   the 

     Commissioner   (Appeals),   Appellate   Tribunal   or,   as 

     the case may be, by the Court shall be deemed to be 

                                                                               10

     an   order   passed   under   the   said   sub-section   (2)   for 

     the purposes of this section."

9. It is manifest from the afore-extracted provisions that Section 

  11BB of the Act comes into play only after an order for refund 

  has been made under Section 11B of the Act.  Section 11BB of  

  the   Act   lays   down   that   in   case   any   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 to be 

  submitted   under   sub-section   (1)   of   Section   11B   of   the   Act, 

  then the applicant shall be paid interest at such rate, as may 

  be fixed by the Central Government, on expiry of a period of 

  three months from the date of receipt of the application. The  

  Explanation   appearing   below   Proviso   to   Section   11BB 

  introduces a deeming fiction that where the order for refund 

  of duty is not made by the Assistant Commissioner of Central 

  Excise or Deputy Commissioner of Central Excise but by an 

  Appellate Authority or the Court, then for the purpose of this 

  Section   the  order   made by  such  higher   Appellate  Authority 

  or by the Court shall be deemed to be an order made under 

  sub-section   (2)   of   Section   11B   of   the   Act.   It   is   clear   that   the 

  Explanation has nothing to do with the postponement of the 

                                                                                      11

    date   from   which   interest   becomes   payable   under   Section 

    11BB of the Act.  Manifestly, interest under Section 11BB of the 

    Act   becomes   payable,   if   on   an   expiry   of   a   period   of   three 

    months from the date of receipt of the application for refund, 

    the   amount   claimed   is   still   not   refunded.     Thus,   the   only 

    interpretation   of   Section   11BB   that   can   be   arrived   at   is   that 

    interest   under   the   said   Section   becomes   payable   on   the 

    expiry of a period of three months from the date of receipt of  

    the application under Sub-section (1) of Section 11B of the Act 

    and  that the  said Explanation  does not have any  bearing  or 

    connection   with   the   date   from   which   interest   under   Section 

    11BB of the Act becomes payable.

10. It   is   a   well   settled   proposition   of   law   that   a   fiscal   legislation  

    has   to   be   construed   strictly   and   one   has   to   look   merely   at 

    what is said in the relevant provision; there is nothing to be 

    read in; nothing to be implied and there is no room for any 

    intendment.   (See:  Cape   Brandy   Syndicate  Vs.  Inland  

    Revenue Commissioners4 and Ajmera Housing Corporation  

    & Anr. Vs. Commissioner of Income Tax5.).

4 [1921] 1 K.B. 64

5 (2010) 8 SCC 739

                                                                                         12

11. At   this   juncture,   it   would   be   apposite   to   extract   a   Circular 

   dated 1st October 2002, issued by the Central Board of Excise 

   &   Customs,   New   Delhi,   wherein   referring   to   its   earlier 

   Circular dated 2nd June 1998, whereby a direction was issued 

   to   fix   responsibility   for   not   disposing   of   the   refund/rebate 

   claims   within   three   months   from   the   date   of   receipt   of 

   application,  the Board has reiterated its earlier stand on the 

   applicability   of   Section   11BB   of   the   Act.     Significantly,   the 

   Board has stressed that the provisions of Section 11BB of the 

   Act   are   attracted   "automatically"   for   any   refund   sanctioned 

   beyond a period of three months.  The Circular reads thus:

                      "Circular No.670/61/2002-CX, dated 1-10-2002

                                                        F.No.268/51/2002-CX.8

                                  Government of India

                 Ministry of Finance (Department of Revenue) 

                Central Board of Excise & Customs, New Delhi

       Subject   :   Non-payment   of   interest   in   refund/rebate   cases   which   are 

       sanctioned beyond three months of filing - regarding 

               I am directed to invite your attention to provisions of 

       section 11BB of Central Excise Act, 1944  that wherever the 

       refund/rebate   claim   is   sanctioned   beyond   the   prescribed 

       period   of   three   months   of   filing   of   the   claim,   the   interest 

       thereon   shall   be   paid   to   the   applicant   at   the   notified   rate. 

       Board   has   been   receiving   a   large   number   of 

       representations   from   claimants   to   say   that   interest   due   to 

       them on sanction of refund/rebate claims beyond a period 

                                                                                                13

       of   three   months   has   not   been   granted   by   Central   Excise 

       formations.     On   perusal   of   the   reports   received   from   field 

       formations   on   such   representations,   it   has   been   observed 

       that in majority of the cases, no reason is cited.   Wherever  

       reasons   are   given,   these   are   found   to   be   very   vague   and 

       unconvincing.     In   one   case   of   consequential   refund,   the 

       jurisdictional Central Excise officers had taken the view that 

       since the Tribunal had in its order not directed for payment 

       of interest, no interest needs to be paid.

       2.     In this connection,  Board would like to stress that the 

       provisions   of   section   11BB   of   Central   Excise   Act,   1944   are 

       attracted automatically for any refund sanctioned beyond a 

       period   of   three   months.     The   jurisdictional   Central   Excise 

       Officers   are   not   required   to   wait   for   instructions   from   any 

       superior officers or to look for instructions in the orders of 

       higher   appellate   authority   for   grant   of   interest. 

       Simultaneously,   Board   would   like   to   draw   attention   to 

       Circular   No.398/31/98-CX,   dated   2-6-98   [1998   (100)   E.L.T. 

       T16] wherein  Board has directed that responsibility should 

       be fixed for not disposing of the refund/rebate claims within 

       three   months   from   the   date   of   receipt   of   application. 

       Accordingly,   jurisdictional   Commissioners   may   devise   a 

       suitable monitoring mechanism to ensure timely disposal of 

       refund/rebate claims.  Whereas all necessary action should 

       be   taken   to   ensure   that   no   interest   liability   is   attracted, 

       should   the   liability   arise,   the   legal   provision   for   the 

       payment of interest should be scrupulously followed."

                                                         (Emphasis supplied)

12. Thus,   ever   since   Section   11BB   was   inserted   in   the   Act   with  

   effect from 26th  May 1995, the department  has  maintained  a 

   consistent   stand   about   its   interpretation.     Explaining   the 

   intent,   import   and   the   manner   in   which   it   is   to   be 

   implemented,   the   Circulars   clearly   state   that   the   relevant 

   date in this regard is the expiry of three months from the date 

   of receipt of the application under Section 11B(1) of the Act. 

                                                                                         14

13. We, thus find substance in the contention of learned counsel  

  for the assessee that in fact the issue stands concluded by the 

  decision of this Court in U.P. Twiga Fiber Glass Ltd. (supra). 

  In the said case,  while dismissing the special leave petition 

  filed by  the revenue and putting its seal  of  approval  on the 

  decision   of   the   Allahabad   High   Court,   this   Court   had 

  observed as under:

     "Heard both the parties.

           In   our   view   the   law   laid   down   by   the   Rajasthan 

     High Court succinctly in the case of  J.K. Cement Works 

     v.  Assistant   Commissioner   of   Central   Excise   &   Customs 

     reported in 2004 (170) E.L.T. 4 vide Para 33: 

                  "A   close   reading   of   Section   11BB,   which 

           now governs the question relating to payment 

           of   interest   on   belated   payment   of   interest, 

           makes   it   clear   that   relevant   date   for   the 

           purpose   of   determining   the   liability   to   pay 

           interest   is   not   the   determination   under   sub-

           section (2) of Section 11B to refund the amount 

           to the applicant and not to be transferred to the 

           Consumer  Welfare Fund but the relevant date 

           is   to   be   determined   with   reference   to   date   of 

           application   laying   claim   to   refund.     The   non-

           payment   of   refund   to   the   applicant   claimant 

           within   three   months   from   the   date   of   such 

           application or in the case governed by proviso 

           to   Section   11BB,   non-payment   within   three 

           months from the date of the commencement of 

           Section   11BB   brings   in   the   starting   point   of 

           liability   to   pay   interest,   notwithstanding   the 

           date on which decision has been rendered by 

           the   competent   authority   as   to   whether   the 

                                                                                15

             amount is to be transferred to Welfare Fund or 

             to   be   paid   to   the   applicant   needs   no 

             interference."

             The   special   leave   petition   is   dismissed.     No 

       costs."

14. At this stage, reference may be made to the decision of this 

  Court   in  Shreeji   Colour   Chem   Industries  (supra),   relied 

  upon   by   the   Delhi   High   Court.     It   is   evident   from   a   bare  

  reading   of   the   decision   that   insofar   as   the   reckoning   of   the 

  period for the purpose of payment of interest under Section 

  11BB of the Act is concerned, emphasis has been laid on the 

  date of receipt of application for refund.  In that case, having 

  noted that application by the assessee requesting for refund, 

  was filed before the Assistant Commissioner on 12th  January 

  2004, the Court directed payment of Statutory interest under 

  the said Section from 12th April 2004 i.e. after the expiry of a 

  period   of   three   months   from   the   date   of   receipt   of   the 

  application.     Thus,   the   said   decision   is   of   no   avail   to   the 

  revenue.

15.          In   view   of   the   above   analysis,   our   answer   to   the 

  question   formulated   in   para   (1)   supra   is   that   the   liability   of  

  the   revenue   to   pay   interest   under   Section   11BB   of   the   Act 

                                                                                  16

  commences from the date of expiry of three months from the 

  date of receipt of application for refund under Section 11B(1) 

  of the Act and not on the expiry of the said period from the 

  date on which order of refund is made.

16.         As   a   sequitur,   C.A.No.6823   of   2010,   filed   by   the 

  assessee   is  allowed   and   C.A.Nos.7637/2009  and  3088/2010, 

  preferred  by  the  revenue  are  dismissed.   The jurisdictional 

  Excise   officers   shall   now   determine   the   amount   of   interest 

  payable   to   the   assessees   in   these   appeals,   under   Section 

  11BB of the Act, on the basis of the legal position, explained 

  above.    The amount(s), if any, so worked  out,  shall  be paid 

  within eight weeks from today.

17.         However, on the facts and in the circumstances of the 

  cases, there will be no order as to costs. 

                                  . ..........................................J.

                                          (D.K. JAIN)

                                 ............................................J.

                                        (ANIL R. DAVE)

  NEW DELHI;

  OCTOBER 21, 2011.

R.S.                                                                         17

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