The requirement of a formal application for refund under Section 11B of the Central Excise Act, 1944, is a statutory mandate, and interest on a delayed refund is payable from the date of receipt of such application.

JUDGMENT

Yashwant Varma, J.

1. These two writ petitions raise the common question of the date from which interest is leviable on an asserted delay in disbursal of refund under the Central Excise Act, 1944¹[1944 Act].

2. According to the petitioners, interest is liable to run from the date when the refund is determined and would not be dependent on any application or other positive step being taken by an assessee. This contention is controverted with the Central Excise Department^{2[Department]} asserting that in light of the plain language of Section 11B read along with Section 11BB of the 1944 Act, the moving of an application is a prerequisite for computation of the date from which interest would be payable on a refund. It is this principal question which falls for determination.

3. For the sake of brevity, the Court deems it apposite to notice the facts as they obtain in the writ petition filed by M/s Goldy Engineering Works vs. Commissioner of Central Excise & Anr., W.P.(C) 4332/2022, On 27 July 2006, a Show Cause Notice^3[SCN] is stated to have been issued to the petitioner, its proprietor, one M/S Aay Kay Engineering Works and its proprietor, in respect of certain goods which had been seized. The aforesaid SCN was followed by another SCN dated 29 January 2007 in terms of which the Department raised a demand for additional duty as well as proposing penal action again against the noticees for having violated the provisions of an exemption notification. The petitioner asserts that during the pendency of those proceedings, it was also forced to deposit an amount of Rs. 20,00,000. The SCNs were ultimately finalized in terms of the order in original dated 08 February 2008.

4. In terms of the aforesaid order, the Additional Commissioner confirmed the duty demand of Rs. 45,31,574/- under Section 11A of the 1944 Act and held the petitioners liable to pay the same along with interest thereon in accordance with Section 11AB of the 1944 Act. Further directions were framed for confiscation of cash amounting to Rs. 44,96,000/- and the imposition of monetary penalties amounting to Rs. 45,31,574/-. The amount of Rs. 20,00,000/- which had been deposited by the petitioners during the pendency of the SCN proceedings was also appropriated against the demands which stood crystallized.

5. Aggrieved by the aforesaid order, the petitioner preferred an appeal. That appeal came to be allowed in toto by the Appellate Authority in terms of its judgment dated 31 December 2008. The Department is stated to have preferred an appeal against that decision before the Customs, Excise and Service Tax Appellate Tribunal^4[CESTAT] which ultimately came to be dismissed on 27 September 2016. Admittedly, while an interim order operated on that appeal, the same came to be discharged once the appeal was dismissed by the CESTAT.

6. The petitioner thereafter and more particularly on 14 November 2016 filed a formal application for refund which had accrued in terms of the order passed by the Appellate Authority on 31 December 2008 and consequent to the challenge thereto being negatived by the CESTAT in terms of its judgment of 27 September 2016.

7. On 23 February 2017, an order is stated to have been drawn for grant of refund to the petitioner. The petitioner alleges that the aforesaid order of refund was never communicated to it and that despite repeated reminders, the respondents failed to apprise the petitioners of the status of its claim for refund constraining it to institute the present writ petition.

8. Upon notices being issued, the respondents have filed a counter affidavit in which it is primarily averred that upon a refund order being drawn, the amounts were remitted to the account of the petitioner electronically and duly credited therein on 01 March 2017. It is the categorical case of the respondents that despite the refund having been duly effected on 01 March 2017, the petitioner chose to raise the issue of interest payable on that refund after mor