Does the liability to pay interest, under section 11BB of the Central Excise Act, 1944, begin three months from a) the date of receipt of a refund application or b) the date on which a refund order is made?
Ruling in Ranbaxy Laboratories Ltd v Union of India & Ors, the Supreme Court held that the liability to pay interest under the Central Excise Act begins from the date of expiry of three months from the date the refund application is received.
The dispute between Ranbaxy and the central excise department was triggered by unsuccessful claims for rebate of duty, amounting to ₹48 million (US$900,000), made between April and May 2003.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
