Provisions relating to interest on delayed refunds [Section 11BB] :

1. Interest is payable to the assessee if the amount claimed as refund is not paid within three months of receipt of refund claim. The interest shall be paid at such rate not below 5% and not exceeding 30% p.a.

2. The interest rate has been fixed by the CBEC as 6% per annum. [Notification No. 67/2003 – C.E. (N.T.) dated 12.9.2003]

3. Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal or any court against an order of the Assistant/Deputy Commissioner of Central Excise under section 11B(2), the order passed by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section.

4. Interest will start from the expiry of three months after date of acknowledgement of application. However, if the matter is pending before the Settlement Commission, the period commencing from date of filing of application and ending with the date of receipt of the case sent back to the officer will be excluded for calculation of interest [Section 32L(3)].