Interest on refunded service tax was upheld where Section 117 required repayment and imposed statutory interest for delay.

Section 117 of the Finance Act, 2000 validated collection of service tax from goods transport operator services and required repayment of any tax refunded under a judgment, decree or order within the prescribed period, failing which interest at 24% per annum became recoverable. The assessee did not dispute the principal refunded tax and sought relief only on financial hardship grounds against the interest demand. The Tribunal held that the statutory wording made interest payable, following its earlier view that tax, penalty and interest were all leviable under the provision, with only prosecution excluded. The interest demand was therefore sustained.

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Issues: Whether interest was leviable on service tax refunded to the assessee under Section 117 of the Finance Act, 2000.

Analysis: Section 117 validated the collection of service tax from users of goods transport operator services and provided for recovery of service tax refunded pursuant to any judgment, decree or order. It also mandated interest at 24% per annum if the refunded tax was not repaid within the prescribed period. The assessee did not dispute the principal demand of the refunded service tax and sought relief only against interest on grounds of financial hardship. The statutory language made interest recoverable, and the Tribunal followed its earlier view that tax, penalty and interest were all leviable under the provision, while prosecution alone was saved.

Conclusion: Interest was held payable under Section 117 of the Finance Act, 2000, and the demand was sustained against the assessee.

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