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Interest on excise refund

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The Supreme Court has ruled that if there is a delay in the refund of excise duty, the assessee firm is entitled to interest on the amount The refund claim should be decided within three months from the date of the application. After that, interest shall be paid according to Section 11BB of the Central Excise Tariff Act, the court stated while dismissing the appeal of the revenue authorities in the case, Union of India vs Hamdard Laboratories. The company was engaged in the manufacture and sale of various items including Rooh Afza, a sweetened non- alcoholic beverage. There was long litigation over the question whether it was a beverage or a concentrate and how it should be classified for purposes of excise duty. The firm won the case in the Allahabad High Court, which ruled that it is a non- alcoholic beverage. The Supreme Court upheld it. The firm then applied for refund. It was given without interest; thus starting another round of litigation in the high court and the Supreme Court. The apex court ruled that there was a delay in the grant of refund and, therefore, the firm was entitled to interest on it.
Business Standard, New Delhi, 21st March 2016

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