TaxTMI 
TaxTMI 
2021 (5) TMI 738
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....ner is engaged in the business of providing support services primarily to its foreign affiliates within the meaning of Chapter V of the Finance Act, 1994. 4. In order to provide such services, petitioner receives various input services and avails credit for service tax paid thereon under rule 3 of the CENVAT Credit Rules, 2004 ("CENVAT Credit Rules" hereinafter). It is stated that services provided by the petitioner qualified as export of service under the erstwhile Export of Service Rules, 2006 as well as under rule 6A of the Service Tax Rules, 1994 read with rule 3 of the Place of Provision of Services Rules, 2012. 5. Hence, petitioner did not pay any service tax on the output services so exported. This resulted into accumulation of CENVAT credit of service tax paid on input services. In terms of rule 5 of the CENVAT Credit Rules, petitioner as provider of output services that are exported is entitled to claim refund of the credit of the service tax paid on the input services that remained unutilized. 6. Accordingly for the period from June, 2008 to December, 2014, petitioner filed 19 refund applications claiming refund of untilized CENVAT credit under rule 5 of the CENV....
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....and thus were not eligible for refund. Responding to such show cause notices, petitioner submitted detailed replies enclosing therewith the requisite documents. 8. Refund sanctioning authority passed orders in original in respect of the refund claims made by the petitioner partially sanctioning the refund amount and partially rejecting the refund amount. Against the orders partially rejecting the refund claim, petitioner preferred appeals before the appellate authority. In those cases, appellate authority passed order in appeal allowing the refund claim of the petitioner whereafter orders in original were passed by the refund sanctioning authority. Details of the orders in original in respect of the refund claimed and refund sanctioned are extracted as under:- Refund Claim Period Refund claimed (Rs.) Order-in-Original No. and Date Refund amount sanctioned (Rs.) Refund Claim 1 June 2008 to September 2008 52,42,806.00 Refund/ES/58/10 dt.04.02.2010 52,42,806.00 Refund Claim 2 April 2009 to June 2009 84,06,204.00 SJ/03/11 dt.19.01.2011 78,80,906.00 34/Refund-I/DK/2016-17 dt.28.04.2016 5,25,298.00 Refund Claim 3 ....
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....,98,046.00 465/Refund-I/DK/2015-16 dt.18.02.2016 40,68,559.00 Refund-ST/RSC/ 43/2018-19 dt.17.10.2018 23,07,921.00 Total 12,47,29,078.00 11,54,28,287.00 9. Subsequently petitioner received the refund amounts as sanctioned. However the refund amounts were sanctioned beyond three months from the date of filing of refund applications. Therefore, petitioner claimed that it was entitled to interest on delayed payment of refund under section 11BB of the Central Excise Act, 1944 made applicable to service tax vide section 83 of the Finance Act, 1994. In such circumstances, petitioner submitted letter dated 15.05.2017 requesting respondent No.3 to grant interest @ 6% p.a. on delayed refund for the period after expiry of three months from the date of application till the date of actual refund. However, there was no response to the said letter dated 15.05.2017. Petitioner again requested respondent No.3 vide letter dated 02.05.2019 to grant interest on the refund amount sanctioned belatedly for the period from June, 2008 to December, 2014. Along with the said letter, petitioner submitted a copy of order dated 09.06.2017 passed by the Central Excise and Servi....
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....s exported and thus were not eligible to refund. In the remaining cases, refund claims were sanctioned by the sanctioning authority after scrutinizing entire relevant documents submitted by the petitioner. Further, refund amount of partially rejected claims were also sanctioned after receiving orders of the appellate authority i.e., Commissioner (Appeals) on appeals filed by the petitioner. With the implementation of goods and services tax (GST) with effect from 01.07.2017, the departmental set up was required to be re-organized. This exercise of reorganization caused certain delay in processing of appeals and in issuing further orders sanctioning refund as per the order in appeals. However, there was no intentional delay by the refund sanctioning authority. 12.3. It is stated that refund claims were sanctioned / granted under section 11B of the Central Excise Act, 1944 as made applicable to service tax vide section 83 of the Finance Act, 1994. Refund claims were sanctioned after personal hearing and after scrutinizing the entire relevant documents of the petitioner. There was no intentional delay in sanctioning of refund by the refund sanctioning authority. 13. Learned couns....
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....s collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person : Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act : Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund : Provided that the amount of duty of excise and interest, if any, paid on such duty as determined by the Assistant Commissioner of Centr....
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....port of the claim. Sub-section (2) of section 11B provides that upon receipt of any such application if the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty by the applicant is refundable, he may make an order accordingly whereafter the amount is to be refunded. 17. Section 11BB deals with interest on delayed refunds. Since this provision is relevant, the same is extracted hereunder:- "Section 11-BB. Interest on delayed refunds.-- If any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under subsection (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent and not exceeding thirty per cent per annum as is for the time being fixed by the Central Government, by Notification in the Official Gazette, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty : Provided that....
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....ue to them on sanction of refund / rebate claims beyond the period of three months had not been granted by the central excise formations, the Central Board stressed that provisions of section 11BB of the Central Excise Act are attracted automatically for any refund sanctioned beyond the period of three months. The jurisdictional central excise officers were impressed upon not to wait for instructions from any superior officer for grant of interest. It was emphasized that all necessary actions should be taken to ensure that no interest liability is attracted but should the liability arise, the legal provision for payment of interest should be scrupulously followed. The aforesaid circular dated 01.10.2002 is quoted hereunder: " Circular No.670/61/2002-CX, dated 1-10-2002 F.No.268/51/2002-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Non-payment of interest in refund/rebate cases which are sanctioned beyond three months of filing - regarding I am directed to invite your attention to provisions of section 11BB of Central Excise Act, 1944 that wherever the refund/rebate claim is sanc....
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....iod of three months from the date of receipt of the application under sub-section (1) of section 11B of the Central Excise Act. It was pointed out that it is a well settled proposition of law that a fiscal legislation has to be construed strictly; one has to look merely at what is said in the relevant provision; there is nothing to be read in; nothing to be implied and there is no room for any intendment. On the basis of the above provisions, Supreme Court clarified that the liability of the revenue to pay interest under section 11BB of the Central Excise Act commences from the date of expiry of three months from the date of receipt of application for refund under section 11B(1) and not on the expiry of three months from the date on which order of refund is made. 21. Shroff United Chemicals Limited Vs. Union of India, 2011 (24) STR 17 is a case where a Division Bench of the Bombay High Court examined the above two provisions and held that entitlement of the applicant to interest on delayed refund once the requisite conditions have been fulfilled follows as a matter of law and is a mandate of the statute. 22. A Division Bench of the Gauhati High Court in Amalgamated Plantation....
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....the first statement, the dates of refund applications are mentioned. In the second statement, the dates of orders granting refund are mentioned. These statements are not disputed by the respondents. From a comparison of the two statements, it is evident that the orders granting refund were passed after expiry of three months from the date of receipt of the refund applications. Taking up one such refund order dated 04.02.2010 pertaining to refund claim for the period from June, 2008 to September, 2008, we find that Assistant Commissioner of Service Tax, Division III, Mumbai had sanctioned refund claim of Rs. 52,42,806.00 under section 11B of the Central Excise Act. The refund claim (application) was received in the office on 29.06.2009 but the refund order was passed on 04.02.2010. Obviously, there is delay and the refund was granted much after expiry of three months from the date of receipt of the application. In fact respondents have not disputed that the refund orders were passed beyond the period of three months from the date of receipt of the refund applications. Only defence put up is that there was no intentional delay by the respondents. We have already analyzed section 11BB....