Tribunal grants interest on delayed refund, appellant successful in appeal

The appeal was successful as the Tribunal ruled in favor of the appellant, granting interest at 12% per annum on the delayed refund from the date of deposit till the date of payment. The department had sanctioned the refund but denied interest, which was contested by the appellant. The Tribunal held that interest should be granted from the date of deposit, citing precedents and rejecting the revenue's arguments. Ultimately, the appellant was entitled to interest on the refunded amount, leading to the appeal being allowed and the impugned order set aside.

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Issues Involved:
1. Non-sanctioning of interest on the refund sanctioned by the department.
2. Rate of interest on delayed refund.

Summary:

Non-Sanctioning of Interest on the Refund Sanctioned by the Department:

The appellant, engaged in providing Visa Consultancy Services, had a dispute with the department regarding the taxability of referral services. To avoid interest and penalty, the appellant deposited Rs. 25,39,804/- under protest during the investigation. The Tribunal decided in favor of the appellant, dropping the demand, and the appellant subsequently filed for a refund. The department sanctioned the refund but denied interest on it. The appellant's appeal for interest was rejected by the Ld. Commissioner (Appeals) on the grounds that the refund was sanctioned within three months from the date of filing the refund application.

Rate of Interest on Delayed Refund:

The appellant argued that the amount paid under protest should be refunded with interest from the date of deposit. The Tribunal has consistently held that interest should be granted from the date of deposit till the date of payment at 12% per annum. The Tribunal cited various decisions, including those of the Kerala High Court and the Ahmadabad Tribunal, supporting the appellant's claim. The Tribunal rejected the revenue's argument that the amount was not paid under protest and highlighted that any amount deposited during adjudication or investigation is considered under protest. The Tribunal concluded that the appellant is entitled to interest at 12% per annum from the date of deposit till the date of payment.

Conclusion:

The impugned order was set aside, and the appeal was allowed, granting the appellant interest at 12% per annum on the delayed refund from the date of deposit till the date of payment.

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