Delhi High Court Directs Adjudicating Authority To Process Blackberry’s Claim Of Interest Under Section 11BB Of The Excise Act

The Delhi High Court has directed the adjudicating authority to process Blackberry’s claim of interest under Section 11BB of the Excise Act.

The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that there is no cavill that the petitioner would be entitled to interest in terms of Section 11BB of the Excise Act from the date immediately after the expiry of three months from the date of receipt of an application for a refund if it is not processed within the said period of three months.

The petitioner/assessee, Blackberry India, is in the business of providing services to Blackberry Singapore Pte. Ltd., an overseas entity. The petitioner claimed that the services provided by it to Blackberry Singapore Pte. Ltd. constituted an export of services in terms of the Service Tax Rules, 1994, and therefore, it was entitled to a refund of unutilized Cenvat Credit.

The Adjudicating Authority has sanctioned the refund of unutilized Cenvat Credit as claimed by the petitioner but has denied the interest on the amount on the ground that the refund has been sanctioned within a period of three months, as contemplated under Section 11BB of the Excise Act read with Section 83 of the Finance Act.

The order indicated that the Adjudicating Authority had considered the date of the application for refund as February 7, 2023, instead of the dates on which the applications were first made.

The petitioner/assessee filed the petition impugning an order passed by the Adjudicating Authority to the extent that it denies the petitioner’s claim for interest under Section 11BB of the Central Excise Act, 1944, on the amount of refund sanctioned.

The controversy essentially relates to the petitioner’s claim for interest on the amount of the refund. The Adjudicating Authority has rejected the same on the ground that the petitioner’s claim was processed within a period of three months from the receipt of its letter dated February 7, 2023. The letter has been treated as an application for a refund under Section 11BB of the Excise Act, read with Section 83 of the Finance Act.

The department contended that the refund should be calculated from the date after the expiration of three months from the date of the CESTAT Order, that is, three months from the order dated December 7, 2022.

The court held that the Adjudicating authority failed to consider that the petitioner had filed its applications for refund on March 28, 2013, March 31, 2014, and June 30, 2014, for the tax periods April–June 2012, April–June 2013, and July–September 2013, respectively. And the interest payable to the petitioner is required to be calculated from the date immediately after the expiration of three months from the dates on which those applications were made.

Case Title: Blackberry India Pvt Ltd. Versus The Assistant Commissioner, Central Excise And CGST Division

Citation: 2023 LiveLaw (Del) 687

Date: 03.08.2023

Counsel For Appellant: Priyanka Rathi, Ashwani Chandrasekharan

Counsel For Respondent: Akshay Amritanshu

Click Here To Read The Order