The liability of the revenue to pay interest under section 11-BB of the Central Excise Act, 1944, commences from the date of expiry of three months from the date of receipt of the application for refund.

ORDER SUJOY PAUL, J. : – The petitioner-company initially filed this petition assailing the impugned notice dated 3-9-2021 (Annexure P-1) with further prayer for refund of the claim to the petitioner along with interest.

2. Learned counsel for the parties at the outset fairly submitted that vide Order-in-Original No. 02/AC/REF/STN/2022-23 dated 5-8-2022, the office of Assistant Commissioner, Central Goods and Service Tax and Central Excise Division, Satna directed sanction rebate claim of Rs. 1,40,02,152/-. Thus, it is jointly contended by learned counsel for the parties that the only question deserves consideration is whether the petitioner is entitled to get interest on this refund.

3. Shri Devnath learned counsel for the petitioner assisted by Shri Akshay Sapre shown his interest only for getting interest on the said refund. By taking this Court to section 11-BB of the Central Excise Act, 1944, (in short ‘the Act’), which deals with ‘interest on delayed refunds’, it is contended that the plain language of Statute makes it clear that if any amount is directed to be refunded is not refunded within three months from the date of receipt of application under sub-section (1) of that section, the applicant shall be paid interest at such rates fixed by the Statute. It is contended that the relevant application was filed by the petitioner way back on 3-9-2014 (Annexure P-2) whereas the respondents paid the refund only on 5-8-2022. Thus, the petitioner became entitled to get interest after three months from 3-9-2014. The respondents contested this claim mainly on the ground that after having passed the order of refund dated 5-8-2022, the competent authority has become functus officio. Attention is drawn on Para 5.3 of the reply. In support of aforesaid claim of interest, learned counsel for the petitioner has placed reliance on the judgment of Supreme Court reported in 2011(10) TMI 16 Supreme Court = (2011) 10 SCC 292, Ranbaxy Laboratories Ltd. vs. Union of India and others.

4. Sounding a contra note, Shri Abhijeet Shrivastava, learned counsel for the respondents submits that the respondents have objection on the claim of interest raised by the petitioner. He raised singular objection by contending that as mentioned in Para-5.3 of the short reply, the adjudicating authority became functus officio and, therefore, question of payment of interest does not arise.

5. Learned counsel for the parties confined their arguments to the extent indicated above.

6. We have heard learned counsel for the parties at length on this aspect.

7. Relevant portion of section 11-B reads thus : –

“11-BB. Interest on delayed refunds. – If any duty ordered to be refunded under sub-section (2) of section 11-B 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 11-B 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 11-B, the order passed by the Commissioner (Appeals), Appellate Tribunal or, as the