TaxTMI 
TaxTMI 
2024 (9) TMI 697
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.... 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 vide the impugned orders allowed the appeal filed by the r....
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....oard'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 refund at present the rate of interest is six per cent per annum as per Notification No. 67/2003- CE(N.T), dated 12.09.2003 to them. Provisions of Section 11B, 11BB, 35F....
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.... 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, 19994. 4.10 Further I find, as per section 142(3) of CGST Act,2017 "Every claim for refund filed by any person before , on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to ....
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....h 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 of the Act is concerned, emphasis has been laid on the date of receipt of application for refund. In that case, having noted that application by the assessee requesting for refund, was filed before the Assistant Commissioner on 12th January 2004, the Court directed payment of Statutory interest under the said Section from 12th April 2004 i.e. after the expiry of a period of three months from the date of receipt of the applica....
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....n 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 annum on amounts that they were entitled by way of refund of tax. Since the concerned amounts along with interest at the rate of 6 per cent per annum have already been made over to them, nothing further need be done in both the cases." 4.4 After taking note of decision of Hon'ble High Court of Allahabad in acse of ebiz.com, Hon'ble Delhi High Court has in case of Goldy Engineering Works [Order dated 14.07.2023 in WP (C) 4332/2022] observed as follows: "....
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....noted, 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 35-F. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal.-The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal- (i) under sub-section (1) of Section 35, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the [Principal Comm....
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....tioner 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 observe in light of the indubitable principle that an order of stay that may operate in an appeal does not efface the demand or the obligation of refund that may have sprung into existence. It merely places the enforcement of the order appealed against in abeyance. The order of stay would, in any case, be deemed to have never existed once the appeal comes to be dismissed. 25. We further note that the subject of interest on delayed refund which is governed by Section 11BB itself prescribes the starting point for payment of interest on delayed refunds to be the date when an application under Section 11B....
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....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 to do so, we deem it pertinent to enter the following prefatory observations. A levy of interest on refund must undoubtedly follow where it is found that the amount has been unjustifiably retained or remitted with undue delay. The respondents cannot be permitted to retain moneys which are otherwise not due or are otherwise liable to be returned. The solitary question which stands raised in these matters is the date from which that interest would flow. In Shri Jagdamba Polymers, the High Court on facts had found that the refund was inordinately delayed even though a claim for the same had been promptly lodged. This is clearly evident from Para....
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....est 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 Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in section 11BB after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount." ....