2026 (8) TMI 1519

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....aled against a demand of Service Tax confirmed by the Commissioner by Order dated 30.5.2014. After making a pre-deposit on 12.11.2014 under section 35F of the Central Excise Act, 1944 made applicable to the service tax by section 83 of the Finance Act, 1994, the appellant appealed to this Tribunal but lost the appeal. On further appeal, the appellant succeeded before the High Court in CEAC 4/2018 in which the High Court passed the judgment and order dated 31.10.2018. Five years after the judgment of the High Court, the appellant sent a letter to the department on 1.4.2024 asking for refund of the pre-deposit along with interest under section 35FF of the Excise Act. 3. By order dated 31.5.2024, the pre-deposit was refunded to the appellan....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rt of the appellant after the judgment of the High Court. All that the appellant had to do was send a simple letter with a copy of the judgment which, by no stretch of imagination, should take over five years. I now proceed to examine the relevant legal provisions. Section 35FF of the Excise Act as applicable to the Service tax during the relevant period reads as follows: "Section 35FF. Interest on delayed refund of amount deposited under section 35F. - Where an amount deposited by the appellant under section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below five per cent. and not exceeding thirty-six per cent. per annu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y interest under section 11AA, it will be at a rate notified by the Government between 10% and 36%. If the department has to pay interest on refunds under section 11BB, it will be at a rate notified by the Government between 5% and 30%. 8. The inequity does not end with the rates of interest under section 11AA and 11BB of the Excise Act. Under section 11AA, the tax payer has to pay interest from the date on which the duty was due till the date of actual payment. Under section 11BB, the department has to pay interest only after 3 months from the date of the application for refund. The difference is much larger than 3 months as would appear at a first glance. Let us say, there is a dispute and the disputed duty or tax was not paid by the a....