Bombay High Court
Empire Industries LimitedversusUnion of India
- Decided
- Disposal
- DISPOSED OFF
Holding
Interest under Section 11BB is payable from the expiry of three months from the date of receipt of the original refund application, not from the date of the appellate order.
Summary
Empire Industries Ltd filed a refund claim under Section 11B of the Central Excise Act, 1944 (r/w Section 83 of the Finance Act, 1994) on 20 May 2015. The claim was allowed by the CESTAT on 8 December 2025, and the refund was paid on 23 June 2026, but the Revenue denied statutory interest under Section 11BB. The petitioner argued, relying on Ranbaxy Laboratories Ltd v. Union of India, that interest should accrue from the expiry of three months after the original application, not from the appellate order date. The Court examined the provisions of Sections 11B and 11BB and held that the Supreme Court’s interpretation is binding. It concluded that the communication of 5 January 2026 was merely a reminder, not a fresh claim, and that the Revenue erred in denying interest. The petition was allowed, the denial of interest was quashed, and the Revenue was directed to pay interest from 20 August 2015 to the date of refund.
Issues considered
- When does interest under Section 11BB of the Central Excise Act become payable – from three months after receipt of the refund application or from the date of the appellate tribunal’s order?
- Whether the communication dated 5 January 2026 constitutes a fresh refund claim under Section 11B.
- Whether the Revenue was justified in denying statutory interest on the refund amount.
Legislation cited
- Central Excise Act, 1944 — s. 11B, 11BB
- Finance Act, 1994 — s. 83
Subjects
- statutory interest
- refund claim
- Central Excise Act
- Section 11B
- Section 11BB
- Finance Act 1994
- CESTAT
- appellate tribunal
- Supreme Court precedent
- tax law
Judgment
Digitally
signed by 3-WP-3460-2026.doc
RUPALI
RUPALI RAJESH
RAJESH WAKODIKAR
WAKODIKAR Date:
2026.09.08
11:15:06
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 3460 OF 2026
Empire Industries Limited )
Empire House, 414, )
Senapathi Bapat Marg, )
Post Box No. 16330, )
Lower Parel (West), )
Mumbai 400 013. )...Petitioner
)
Versus )
)
1. Union of India, )
through its Secretary, )
Ministry of Finance, )
Department of Revenue, )
North Block, New Delhi – 110 001. )
)
2. The Commissioner of CGST, )
Mumbai Central Commissionerate, )
10th Floor, Lotus Info Centre, )
372, Parel Station Road, )
Off Elphinstone Bridge, Parel (East) )
Mumbai 400 012. )
)
3. The Assistant Commissioner Division – III, )
CGST & CX, Mumbai. )
th
8 Floor, Piramal Chamber, )
Jijibhoy Lane, Lalbaug Parel, )
Mumbai 400 012. )...Respondents
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Mr. Jas Sanghavi for the Petitioner.
Mr. Satyaprakash Sharma a/w Ms. Kavita Shukla, Ms. Vaishali
Malekar & Mr. Gaurav Gupta for the Respondent Nos.1 to 3.
CORAM : M. S. KARNIK &
SANDESH D. PATIL JJ.
RESERVED ON : 2nd SEPTEMBER, 2026
PRONOUNCED ON :7th SEPTEMBER, 2026
JUDGMENT (PER SANDESH D. PATIL, J.)
1. The petitioner is challenging the order-in-Original dated
24th March, 2026 passed by the respondent No. 3 to the extent, it
denies statutory interest, payable under Section 11BB of the Central
Excise Act, 1944 r/w Section 83 of Chapter V of Finance Act, 1994,
after the expiry of three months from the date of refund application
from 20th August, 2015 till the date, the aforesaid amount of Rs.
53,05,173/- was paid to the petitioner on 23rd June, 2026.
2. The petitioner contends that in the Judgment of Ranbaxy
Laboratories Ltd Vs. The Union of India 1 and other binding
1 2011 (273) E.L.T. 3 SC
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decisions of this court, it was held that the interest is payable from
the expiry of three months from the date of filing of the application
till the date of refund under Section 11B of the Excise Act and not
from the date of favourable order of the Appellate Tribunal. It is
further submitted that the respondent No.3 has wrongly construed
the communication dated 5th January, 2026 as refund claim to deny
interest to the petitioner.
3. The learned Counsel for the petitioner contended that the
original refund application under Section 11B of the Excise Act r/w
Section 83 of the Finance Act was filed on 20 th May, 2015. The same
claim was ultimately allowed by the Appellate Tribunal vide its order
dated 8th December, 2025. Thus, the said communication dated 5th
January, 2026 was only a continuation/reminder of original claim
filed on 20th May, 2015 and could not be construed as refund claim
under Section 11B of the Excise Act. The petitioner lastly claimed
that the respondent should grant/pay interest under Section 11BB of
the Excise Act from the expiry of three months from the date of
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application i.e. from 20th August, 2015, till the date of actual refund
i.e. 23rd June, 2026.
4. The petitioner has relied upon a compilation of judgments
to buttress their contention. The learned Counsel appearing for the
respondent/Revenue stated that the refund claim of Rs.53,05,173/-
was paid by the petitioner under protest along with interest and they
had submitted copies of ST – return amounting to Rs.53,05,173/-.
He relied upon provisions of Section 11B of the Cental Excise Act,
1944 as made applicable to Chapter V of the Finance Act, 1994 vide
Section 83.
5. He submitted that the refund claim arises from a case
where duty becomes refundable as a consequence of CESTAT order
issued on 8th December, 2025. The respondent further relied upon
Section 11BB of the Central Excise Act, 1944. He further stated that
the refund claim against the subject order has been filed by the
Assessee vide their office letter dated 5th January, 2026. According to
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him, as per Section 11BB of the Central Excise Act, 1944 the interest
is payable only in cases where the refund amount is not paid within a
period of three months from the date of order of refund. He
therefore, prayed for dismissal of the petition.
6. We have gone through the contentions raised by the
learned Counsel appearing for both the sides. We have also
considered the purport of Section 11B and Section 11BB of the
Central Excise Act, 1944. We have further also considered the
provisions of Section 83 of the Finance Act, 1994.
7. This Court in the matter of Ranbaxy Laboratories Ltd
(supra) had occasion to consider some similar situation. This Court,
after analyzing the provisions of Finance Act as well as the Central
Excise Act had observed as under :
“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
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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 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. …..
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11. …..
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.”
8. In view of the binding decision of the Hon’ble Supreme
Court in the matter of Ranbaxy Laboratories Ltd (supra), we have
reached to a conclusion that there is substance in the contention of
the petitioner. In this case also the interest payable was from expiry
of three months from the date of filing of the application till the date
of refund under Section 11B of the Excise Act and not from the date
of favourable order passed by the Appellate Tribunal i.e. on 8 th
December, 2025. The respondent No.3 committed a serious error in
construing that the communication dated 5th January, 2026 was a
refund claim. The original refund application under Section 11B of
the Excise Act r/w Section 83 of the Finance Act was filed on 20 th
May, 2015. The claim was ultimately allowed by the Appellant
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Tribunal on 8th December, 2025. Thus, the communication dated 5 th
January, 2026 was only a continuation/reminder of the original
claim filed by the petitioner on 20th May, 2015 and could not be
construed as a refund claim under Section 11B of the Excise Act.
9. Having made the aforesaid observations, we are inclined
to allow this petition. Hence, the following order.
ORDER
(i) The petition is allowed.
(ii) The order dated 24th March, 2026 passed by the
respondent No.3 to the extent it denied statutory interest
on the refund amount of Rs.53,05,173/- sanctioned to the
petitioner, is quashed and set aside.
(iii) The respondent No. 3 is directed to refund an
amount of Rs.53,05,173/- alongwith statutory interest
thereon from 20th August, 2015, till the date of actual
refund within a period of eight weeks from the date of
passing of this order.
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10. With the aforesaid observations, petition is disposed of.
(SANDESH D. PATIL, J.) (M. S. KARNIK, J.)
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