2023 (4) TMI 1015 - AT - Service Tax

Appeal granted: Interest claim allowed post-refund application.

Gautam Builders Versus CG & ST, Chandigarh

Gautam Builders Versus CG & ST, Chandigarh - TMI Issues:The judgment involves the eligibility for interest on a refund amount, specifically focusing on the period for which interest should be granted.Summary:The appellant, engaged in providing various services, filed a refund application for service tax paid during the financial year 2015-16, amounting to Rs.80,20,869. The application was filed on 14.9.2016, seeking a refund of Rs.31,71,754 after withdrawing a portion of the claim. The Assistant Commissioner initially rejected the refund claim but was later accepted by the Commissioner (Appeals) who sanctioned a refund of Rs.30,20,628 on 9.10.2020 without granting any interest on the delayed payment. The appellant appealed for interest as per section 11BB of the Central Excise Act, 1944, and eventually received the refund on 17.12.2020 without any interest.Upon hearing both parties, the Tribunal noted that the only issue was the date from which the appellant is entitled to claim interest on the delayed payment of the refund. Citing the Supreme Court's decision in the case of M/s. Ranbaxy Laboratories Ltd., the Tribunal clarified that interest becomes payable after three months from the date of the refund application. It was emphasized that interest under Section 11BB of the Act is triggered automatically for any refund sanctioned beyond three months. The Tribunal also referred to a Circular by the Central Board of Excise & Customs, stressing the importance of timely refund processing and interest payment in such cases.Based on the legal interpretations and precedents, the Tribunal allowed the appeal, granting the appellant the entitlement to claim interest after three months from the date of the refund application until realization, in line with previous decisions of the Tribunal and the Supreme Court.The judgment was pronounced in open court on 31.03.2023.