TaxTMI 
TaxTMI 
2024 (9) TMI 697
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.... vide registration no ACWPT7273LSD001 for providing taxable services under the category "Business Auxiliary Services". They have been appointed as selling agent or a Distributor for the revenue district of Hardoi by M/s Bharat Sanchar Nigam Limited for the SIM Cards & Recharge Coupons and TOP up Vouchers through the network of retailers which was not taxable as entire service tax had already been paid by BSNL. 2.2 appellant deposited Rs 3,86,161/- and Rs 4,72,676/- under protest on pursuance of department. 2.6 Appellant filed claims for refund of the amounts deposited under protest. The amount deposited under protest was refunded without paying interest. They were sanctioned refund of service tax amounting to Rs 4,78,499/- + Rs 4,54,809/- vide O-I-O's dated 11.06.2019. However no interest was granted by said orders. 2.7 Appellant filed refund claim claiming the interest on the amounts sanctioned by the above orders. These claims were allowed by the original authority vide Order-in- Original No. vide Order-in-Original No. 08/ST/ Refund/AC/STP/2019 Dated: 09-07-2019 for amount of Rs. 4,40,947/- . 2.8 Revenue challenged these orders before the Commissioner (Appeal) who has....
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....- Original No. 02/ST/Refund /AC/STP/2019 & 03 /ST/Refund /AC /STP/2019 both dated 11.06.2019 4.3 Further I find that as per Para-5 of the Board's Circular No 984/08/2014-CX diated 12.2014 issued vide F. No. 390/Budget/1/2012-JC, Government of India, Ministry of Finance Department of Revenue (Central Board of Excise & Customs), New Delhi, states that 5.1 Where the appeal is decided in favour of the party / assessee, he shall be entitled to refund of the amount deposited alongwith the interest at the prescribed rate from the date of making the deposit to the date of refund in terms of Section 35FF of theCentral Excise Act, 1944 or Section 129EE of the Customs Act, 1962. 5.2 Pre-deposit for filing appeal is not payment of duty. Hence, refund of pre-deposit need not be subjected to the process ofrefund of duty under Section 11B of the Central Excise Act, 1944 or Section 27 of the Customs Act, 1962. 4.4 Further I find that the party has deposited service tax after pursuing by the Department under protest during litigation. The department has sanctioned Refund Claim of Rs. 3,86,161/- and Rs 4,72,676/- without interest so interest is also liable to ....
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....erest is six per cent per annum. 4.7 I observe that the party has deposited service tax which was not liable to pay to the party so the same was refunded to them and the amount of Rs,4,62,402/- is interest as applicable on refund amount. Since, this amount of interest, therefore question of passing it to any other person does not arise. Thus the provisions of unjust enrichment enshrined under Section 11B are not applicable in this case. 4.8 Now, coming on the limitation period, I also observe that the instant refund claim has been filed by the party within one year from the amount refunded by the authority viz. the date of order dated 15.07.2019 passed by the Assistant Commissioner, CGST & Central Excise, Division Sitapur as required in terms of Section 11B of the Central Excise Act, 1944. 4.9 Thus. in compliance with 35F & 35FF of the Central Excise Act, 1944. interest Rs 4,62,402/- calculated on refund sanctioned to the party, is found liable to be refunded to the party in terms of governing legal provisions of Section 11B, 11BB, 35F & 35FF of the Central Excise Act, 1944 as made applicable in service tax matters vide Section 83 of the Finance Act, 1999....
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....ate for the purpose of determining the liability to pay interest is not the determination under subsection (2) of Section 11B to refund the amount to the applicant and not to be transferred to the Consumer Welfare Fund but the relevant date is to be determined with reference to date of application laying claim to refund. The non- payment of refund to the applicant claimant within three months from the date of such application or in the case governed by proviso to Section 11BB, non-payment within three months from the date of the commencement of Section 11BB brings in the starting point of liability to pay interest, notwithstanding the date on which decision has been rendered by the competent authority as to whether the amount is to be transferred to Welfare Fund or to be paid to the applicant needs no interference." The special leave petition is dismissed. No costs." 14. At this stage, reference may be made to the decision of this Court in Shreeji Colour Chem Industries (supra), relied upon by the Delhi High Court. It is evident from a bare reading of the decision that insofar as the reckoning of the period for the purpose of payment of interest under Section 11BB....
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....ons made by this Court in Paragraph 48 of the decision are quite clear that "the award of interest in refund and amount must be as per the statutory provisions of law and whenever a specific provision has been made under the statute such provision has to govern the field." The subsequent decision of the Bench of three Judges in Gujarat Fluoro Chemicals noticed that the grant of interest at the rate of 9 per cent was in the facts of the case in Sandvik Asia Ltd. 19. Since the delay in the instant case was in the region of 94 to 290 days and not so inordinate as was the case in Sandvik Asia Ltd., the matter has to be seen purely in the light of the concerned statutory provisions. In terms of the principal part of Section 56 of the CGST Act, the interest would be awarded at the rate of 6 per cent. The award of interest at 9 per cent would be attracted only if the matter was covered by the proviso to the said Section 56. The High Court was in error in awarding interest at the rate exceeding 6 per cent in the instant matters. 20. We, therefore, allow these appeals and direct that the original writ petitioners would be entitled to interest at the rate of 6 per cent per ....
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....r operated on that appeal, the same came to be discharged once the appeal was dismissed by the CESTAT. 6. The petitioner thereafter and more particularly on 14 November 2016 filed a formal application for refund which had accrued in terms of the order passed by the Appellate Authority on 31 December 2008 and consequent to the challenge thereto being negatived by the CESTAT in terms of its judgment of 27 September 2016. 21. For the purposes of evaluating the submissions aforenoted, it would be apposite to notice the statutory provisions which apply. The issue of refund and the interest payable in case of delay is governed by Sections 11B and 11BB. The said provisions are reproduced hereinbelow: - "Section 11-B. Claim for refund of [duty and interest, if any, paid on such duty].- .... Section 11-BB. Interest on delayed refunds.- ... 22. It would also be pertinent to notice Sections 35F and 35FF in order to highlight the distinction between the statutory scheme underlying refund of duty and the return of a pre-deposit made in connection with an appeal that may be preferred. Those two provisions are extracted hereinbelow: - "Section....
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....he date of payment of the amount till, the date of refund of such amount : Provided that the amount deposited under Section 35-F, prior to the commencement of the Finance (No. 2) Act, 2014, shall continue to be governed by the provisions of Section 35-FF as it stood before the commencement of the said Act." 23. The Court, at the outset notes, that Section 11B(1) in clear and unambiguous terms contemplates the making of an application for refund being made by any person claiming refund of any duty of excise and interest paid on such duty. The claim of refund insofar as the petitioner is concerned arose in the backdrop of the order in original coming to be set aside in appeal. The petitioner appears to have made an application for refund ultimately and only after the departmental appeal before the CESTAT came to be dismissed. 24. We deem it apposite to observe that the mere pendency of an appeal or an order of stay that may operate thereon would not detract from the obligation of any person claiming a refund making an application as contemplated under Section 11B(1) within the period prescribed and computed with reference to the "relevant date". We do so ob....
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.... mind the language employed in the latter and which stipulates that interest would commence from the date when the amount deposited by the appellant under Section 35F is required to be refunded consequent to an order passed by the Appellate Authority. Section 35FF thus indicates that interest would commence from the date of the order of the Appellate Authority as distinct from the making of an application which is prescribed to be the starting point insofar as Section 11BB of the 1944 Act is concerned. 29. Regard must also be had to the fact that in the case of refund of duty, it is also incumbent upon the assessee to declare and establish that the burden of tax has not been passed on. Absent that declaration, any refund that may be made would itself amount to the assessee being unjustly enriched. The making of an application and a declaration to the aforesaid effect is thus not merely an empty formality. This too appears to reinforce the imperatives of an application being formally made before a claim for refund is considered. 30. That only leaves the Court to consider the decisions which were cited by Mr. Mishra for our consideration. However, before proceeding ....
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....ns 11B and 11BB." 4.5 Thus in terms of the above decisions undisputedly appellant is entitled to interest on the amounts refunded to him after the dispute was finally determined in their favour by the order of this tribunal. However the interest as per these orders would necessary be governed by the provisions of section 11BB and should be paid after expiry of three months from the date of receipt of the application for refund and not from the date of deposit as has been held by the original authority in the orders dated 09.07.2019 and 18.07.2019. Even if it is held that appellant was entitled to refund of interest as per section 35 FF then also the interest could not have been paid from the date of deposit, in view of the Proviso to section 35FF, which provided that in respect of the amounts deposited prior commencement of Finance (No. 2) Act, 2014 the provisions as contained in erstwhile section 35FF shall apply. Section 35FF prior to amendment made by Finance Act,2014 read as follows: "35FF Interest on delayed refund of amount deposited under the proviso to section 35F.-- Where an amount deposited by the appellant in Pursuance of an order passed by the Commi....