2015 (11) TMI 974 - AT - Service Tax

Tribunal Rules on Interest for Refund Claim Period

The Tribunal determined that interest on a refund amount should be paid from the date of the refund claim submission, 24.04.2005, to the date of refund ... Claim of Interest on refund - applicable date up to which the interest is to be paid - initially refund was credited to consumer welfare fund on the ground of unjust enrichment - revenue contended that refund was sanctioned on 03.6.2008 and department has credited the same to the Consumer Welfare Fund as per law. Hence, department was liable to pay interest only from 24.04.2005 to 02.6.2008. - appellant claims that interest may also be paid to them from 24.04.2005 to 10.03.2010, on which date the refund was made to them in pursuance to the said order of the Tribunal. Held that:- As the Revenue had sanctioned refund claim on 03.6.2008 and transferred the amount to Consumer Welfare Fund as per the provisions of law, Revenue cannot be held to be liable to grant interest subsequent to the period from 03.6.2008. The appellant instead of Welfare Fund became eligible for the refund amount in the light of the order of the Tribunal. Hence, whatever was due to Welfare Fund was liable to be transferred to the Appellant. The appellant is therefore rightfully entitled for the refund amount along with interest for the period from 24.4.2005 to 02.6.2008, as held by the Commissioner (Appeals) in the impugned order - Decisions in the case of Salem Cylinders Pvt. Limited vs. CCE, Salem (2013 (6) TMI 579 - CESTAT CHENNAI) distinguished - Decided against Assessee. Issues involved:Determining the applicable date for payment of interest on a refund sanctioned.Analysis:1. Issue of Applicable Date for Interest Payment:The case involved a dispute regarding the date up to which interest should be paid on a refund sanctioned to the appellant. The appellant filed a refund claim on 24.01.2005, which was partially rejected by the Assistant Commissioner. The Commissioner (Appeals) upheld part of the claim but ordered it to be transferred to the Consumer Welfare Fund due to unjust enrichment. The Tribunal later overturned the unjust enrichment ruling and directed the refund amount to be paid to the appellant. The key contention was the period for which interest should be paid on the refund amount of &8377; 28,94,976/-. The appellant argued for interest from 24.04.2005 to 10.03.2010, the date of refund. The Revenue contended that interest should only be paid from 24.04.2005 to 02.06.2008, the date of refund sanction.2. Adjudication and Tribunal's Decision:After considering both parties' arguments, the Tribunal analyzed the timeline of events. The refund claim was submitted on 24.01.2005 and was sanctioned on 03.06.2008 but transferred to the Consumer Welfare Fund due to unjust enrichment. The Tribunal's order on 11.12.2009 changed the status, allowing the refund to the appellant. The Tribunal concluded that interest should be paid from the date of refund claim submission, 24.04.2005, up to the date of refund sanction, 02.06.2008. As the refund was granted within three months of the Tribunal's order, no further interest was payable post-03.06.2008. The Tribunal upheld the Commissioner (Appeals) decision to grant interest for the specified period.3. Legal Precedents and Conformity:The Tribunal referenced the Supreme Court's decision in Ranbaxy Laboratories Limited vs. UOI & Ors., which established the commencement of interest liability from three months after the refund claim submission. The Tribunal found that interest was correctly sanctioned in this case following the Supreme Court's ruling. Additionally, the Tribunal differentiated the case from Salem Cylinders Pvt. Limited vs. CCE, Salem, emphasizing the unique circumstances of each case. The Tribunal found no grounds to interfere with the impugned order-in-appeal and upheld the decision to reject the appellant's appeal.In conclusion, the Tribunal resolved the issue by determining the period for interest payment on the refund amount, aligning with legal precedents and the specific facts of the case.