Appeal dismissed for interest claim on delayed tax refunds. Statutory rate applies. No adjustment rule.

The Tribunal dismissed the appeals, holding that the appellant is not entitled to interest on delayed payment of interest and that the statutory rate of interest on delayed refunds is applicable. The Tribunal also rejected the argument for adjusting the refunded amount towards interest liability first, affirming that such a rule is not applicable in the context of indirect tax refunds. The orders under challenge were upheld, and the appeals were dismissed.

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Issues Involved:
1. Entitlement to interest on delayed refund claims.
2. Entitlement to interest on delayed payment of interest.
3. Rate of interest applicable on delayed refunds.
4. Adjustment of refunded amount towards interest liability first.

Detailed Analysis:

1. Entitlement to Interest on Delayed Refund Claims:
The appellant filed refund claims for service tax paid on services used for export of goods for the period from April 2008 to June 2008. These claims were initially rejected but were later affirmed by the Tribunal and remanded for re-examination. The refund claims were sanctioned in 2015 but without interest from the date of filing. The Commissioner (Appeals) later sanctioned interest from the date of receipt of the application for refund, not from the date of filing.

2. Entitlement to Interest on Delayed Payment of Interest:
The appellant sought interest on the delayed payment of interest, arguing that interest is compensatory in nature and citing the Supreme Court's decision in Sandvik Asia Ltd. vs. CIT. However, the Tribunal noted that the provision under Section 11BB of the Central Excise Act, 1944, does not provide for interest on delayed payment of interest. The Tribunal clarified that the Supreme Court in Sandvik Asia Ltd. did not grant interest on interest but rather compensation for inordinate delay, which is not within the Tribunal's power to grant.

3. Rate of Interest Applicable on Delayed Refunds:
The appellant initially sought interest at 12.5% on the refund amount but was sanctioned interest at a statutory rate of 6%. The Tribunal upheld the statutory rate, noting that the relevant provision prescribes a rate not below 10% and not exceeding 30% per annum, as fixed by the Board. The Tribunal emphasized that only the interest provided under the statute can be claimed, and no additional interest on such statutory interest is permissible.

4. Adjustment of Refunded Amount Towards Interest Liability First:
The appellant argued that the refunded amount should first be adjusted towards the interest liability and then towards the principal amount. The Tribunal rejected this argument, stating that the rule of first appropriating the interest applies only to debts or decreetal amounts, which is not applicable to the present case of refund of indirect taxes. The Tribunal referenced the Civil Procedure Code and clarified that this provision is excluded from the Central Excise Act, 1944.

Conclusion:
The Tribunal dismissed the appeals, holding that the appellant is not entitled to interest on the delayed payment of interest and that the statutory rate of interest on delayed refunds is applicable. The Tribunal also rejected the argument for adjusting the refunded amount towards interest liability first, affirming that such a rule is not applicable in the context of indirect tax refunds. The orders under challenge were upheld, and the appeals were dismissed.

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