TaxTMI 
TaxTMI 
2026 (9) TMI 1758
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....er refund sanctioned amount of Rs 41,00,195/- in respect of refund claim filed by the M/s H T Media Limited, 18-20, Kasturba Ganddh Marg, New Delhi 110001. 2.1 Appellant was registered as service provider with Service Tax Department vide STC No. AABCH3165PST001. They had filed refund claim for Rs. 2 crores for the refund on pre-deposit made by them on 24.10.2017. 2.2 A demand was confirmed against the appellant vide order-in-original no. order-in-original no. 27-28/SRB/2014 dated 13.02.2014 passed by Commissioner (Adjudication). By said order following was held: ORDER A In respect of Show Cause Notice C.No. 1- 26(494)ST/AMR(Group Media/2010 dated 21.04.2011 A9)/243/HT (i) I confirm the demand of service tax amounting to Rs. 2,75,64,632/- (Rupees Two Crore Seventy Five Lakh Sixty Four Thousand Six Hundred Thirty Two) (Rs. 1,12,51,048/- Rs. 8,50,101/- Rs. 39,25,068/- + Rs. 1,15,38,415/-) including Education Cess & S.H.Ed. Cess not paid by M/s HT Media Limited, having Registered office at 18-20 Hindustan Times House, K.G. Marg, New Delhi-110001 under proviso to Section 73(1) of the Finance Act, 1994 read with Section 66A and 68 of the Act, ibid and Rule 6 of....
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....industan Times House, K.G. Marg, New Delhi-110001 under Section 77 of the provisions of Finance Act, 1994 as amended in as much as they failed correctly assess & discharge their Service tax liability correctly for the period 2011-2012. (iv) I impose a penalty which shall not be less than Rupees One hundred rupees for every day during which such failure continues or at the rate of One per cent of such tax, per month, whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax upon M/s HT Media Limited, having Registered office at 18-20 Hindustan Times House, K.G. Marg, New Delhi-110001 under Section 76 of the Finance Act, 1994, Act, 1994 for non-payment/short payment of Service Tax on the said services as stated herein above. However, the total penalty shall not exceed the fifty percent of the total service tax payable by the noticee. 2.3 Appellant filed appeal against this order and sought stay of the recovery of the amounts demanded as per the order as per the extant provisions of Section 35F of Central Excise Act, 1944 read with Section 83 of Finance Act, 1994. Vide Stay Order No. SO/5041....
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....d. Thereafter, a reasoned order shall be passed considering the reply to such SCN and after providing a fair opportunity of hearing to appellant. 2.8 In terms of the above order another show cause notice was issued to the appellant which culminated in the order-in-original no. 03/Refund/MC/Div-CP/2022-23 dated 06.05.2022 referred in para 1 above. Aggrieved appellant filed appeal before Commissioner (Appeals) which has been disposed of as per the impugned order. 2.9 Aggrieved appellant filed this appeal. 3. We have heard. Mr. Ashok Dhingra and Ms. Sonia Gupta Advocate for the appellant and Ms. Jaya Kumari, authorized representative appearing for the department. 3.1 Arguing for the appellant, learned counsel submits that;- ⮚ service tax and interest is payable only on intellect telecommunication services. ⮚ Demand and recovery of interest and penalty from pre-deposit in refund proceedings is bad in law. ⮚ Appellant is entitled to interest on refund of pre-deposit. Appellant claims the refund of the amount alongwith interest in terms of provisions of the Section 35FF. ⮚ Hon'ble Supreme Court has vide order dat....
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....inion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue. Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing...." From 06.08.2014, the provisions of Section 35F of Central Excise Act was `substituted and the amended Section 35F is reproduced hereunder: Section 35F Deposit of certain percentage of duty demanded or penalty imposed before filling 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 demanded or penalty imposed or both, in pursuance of a decision or ....
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....ll the date of refund of such amount. Further, with effect from 6th August 2014 the provisions of Section 35 FF of Central Excise Act 1944 underwent a change and the amended section read as under: "35FF. Interest 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 annum as is for the time being fixed by the Central Government, by notification - `in the Official Gazette, on such amount from the date of payment of amount till, the date of refund of such amount: Provided that the amount deposited under section 35F, prior to the commencement of the Finance (No. 2) Act, 2014, shall continue to be governed by the provisions of section 35FF as it stood before the commencement of the said Act." 5.1.3 From the above provisions, I note that prior to 6.8.2014, the pre-deposit of percentage of duty confirmed or penalty imposed for filing appeal before Commissioner (Appeals) or CESTAT was not mandatory....
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.....08.2011 was issued to the respondent demanding service tax with interest and penalty and this demand was confirmed by the adjudicating authority by order dated 30.04.2013. Feeling aggrieved, the respondent filed an appeal before the Tribunal on 05.08.2013. Section 83 of the Finance Act, 19944 makes applicable the provisions of sections 35F and 35FF of the Excise Act to service tax matters. Section 35F, as it stood prior to 06.08.2014, required the person desirous of filing an appeal to deposit the amount demanded under the order against which the appeal was being filed, but the Tribunal could, under the first proviso, dispense with such deposit subject to such conditions as it deemed fit to safeguard the interest of the Revenue. The appellant moved an application before the Tribunal for waiver of pre-deposit and by an order dated 11.05.20.16, the Tribunal disposed of the application by directing that a pre-deposit of Rs. 30 crores should be made within a period of eight weeks. .................... 25. Thus, a clear distinction has been drawn between the amount deposited under the unamended provisions of section 35F and the amended provisions of section 35F. It ha....
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....y in the case of delay beyond three months in granting the refund. I note from Para 25 of the impugned order that there was no delay in sanctioning the refund claim as the same was processed within 90 days from the last reply of the appellant wherein they submitted complete set of requisite documents/ clarifications/information required for processing .of refund. Thus, I do not find any reason to interfere with the orders of Adjudicating Authority to this extent. 5.2 I next take up the issue whether any interest on the confirmed demand of Rs. 60,56,180/- (this principal amount of Rs. 60,56,180/- has not been disputed by the appellant) is recoverable from the amount to be - refunded to the appellant. In this regard, the contention of the appellant is that the Hon'ble Tribunal in its order dated 31.08.2017 supra did not order for recovery of any interest on the duty demand and the said order of the Tribunal has attained finality. They have further contended that there is no case for adjudication- of demand of Service Tax and consequently interest thereon pending before the department, hence confirming demand of interest now, vide the impugned Order is bad in law. ....
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....law. [paras 51, 52] (iii) Hon'ble High Court, Karnataka in the matter of CCE & ST, Bangalore Us. Bill Forge Pvt. Ltd. reported in 2012 (26) S.T.R. 204 (Kar.) has held that: Interest - Liability of - It is compensation to Revenue and imposed on assessee who had withheld payment of tax as and when it was due and payable - Delay beyond date when duty is payable deprives Revenue of the duty, and said amount is in possession of assessee who would have its benefit - Its levy is on actual amount which is withheld and extent of delay in paying tax on due date - If there is no liability to pay duty/ tax, there is no liability to pay interest - Section 11 AB of Central Excise Act, 1944. [paras .11, 2.1] 5.2.4 Therefore, the contention of the appellant that the levy of interest on the duty demand is bad in law cannot be accepted and the same is to be rejected. 5.3 I next take up the issue whether imposition of penalty by the AA and its recovery from the pre-deposit amount by him is proper or not. 5.3.1 In this regard, the contention of the appellant is that imposition of penalty is without jurisdiction as once the Hon'ble Tribunal, vide Final Order ....
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....any forum which is also evidenced at Para 3 of the CESTAT's Order dated 31.08.2017. 5.3.4 In the impugned context, I would further refer to and rely upon the following decisions: (i) Hon'ble CESTAT, Mumbai in the matter of MIT Institute of Design Vs. CC. Ex. & ST, Pune-III reported in 2019 (22) G.S.T.L. 453 (Tn. - Mumbai) has held that: Commercial Coaching or Training Services - Graduate and Post-Graduate Diploma in field of Design - Service Tax for period 1-4-2011 to 30-6-2012 - No justification or reason in not following Tribunal's findings in Final Order Nos. A/9015790158/2017-WZB/STB, dated 12-10-2017 in assessee's own case for previous period, holding services rendered in nature of Commercial Training or Coaching services and leviable Service Tax for period in question - Section 73 of Finance Act, 1994. [paras 6.1, 6.2] Demand and penalty - Limitation - Larger period, invocation of - Allegation of non-payment of Service Tax on `other income' raised in third show cause notice - All information available in balance-sheet under head `other income' available to department while issuing second show cause notice but no objection raised by Re....
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.... to evade payment of duty, penalty equal to duty liable to be imposed - Same reasoning in challenge against demand of interest - Sections 11AB and IIAC ibid. [paras 5, 6j Demand - Limitation - Extended period - Supreme Court in Rajasthan Spinning and Weaving Mills 2009 (238) E.L.T. 3 (S.C.)] held grounds embodied 1n proviso to Section 11AC of Central Excise Act, 1944 for invoking extended period of limitation for recovery of duty, identical to those in Section 11AC ibid for imposition of penalty - Identical grounds, separately specified in two provisions - Had it been intention of Legislature that Section IIAC ibid applicable only to those cases when provision of Section 1 JA (1) invoked for recovery of duty, it would not be necessary for Legislature to form text of Section IIA.C 1n manner it did - Section IIAC not exclusively applicable to case in which proviso to Section IIA(1) is invoked - It can be applied where duty demanded for normal period of limitation, if grounds laid down in Section l1AC established - Rajasthan Spinning and Weaving Mills 12009 (238) E.L.T. 3 (S.C.)] relied upon - Apex Court not seized of category of case where duty is demanded for normal period of limita....
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....that tribunal has in its order set aside the penalties imposed upon the appellant. In the refund proceedings seeking refund of pre-deposit made as per the stay order of the tribunal, the revenue could not initiate another proceeding for imposition of fresh penalties on the appellant. In any case if possible they could have proceeded separately if permissible in law. 4.4 The refund has risen out of the above order and is in respect of the pre-deposit made by the appellant in terms of the stay order referred earlier. The penalty proceedings initiated against the appellant in respect of refund claim made for refund of the pre-deposit go contrary to settled principles of judicial discipline and the refund claim should have been examined strictly in accordance with the order of tribunal setting aside the part demand. That being so, we do not find any merits in the imposition of penalties and appropriation of the same against the refund due to the appellant 4.5 We also observe that subsequently the demand in respect of event management services upheld by the tribunal have also been set aside by the Hon'ble Supreme Court. Thus refund of the amounts which form the part of amount depo....
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....ixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. Manifestly, interest under Section 11BB of the Act becomes payable, if on an expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpretation of Section 11BB that can be arrived at is that interest under the said Section becomes payable on the expiry of a period of three months from the date of receipt of the application under Sub-section (1) of Section 11B of the Act and th....
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....ral Excise officers had taken the view that since the Tribunal had in its order not directed for payment of interest, no interest needs to be paid. 2. In this connection, Board would like to stress that the provisions of section 11BB of Central Excise Act, 1944 are attracted automatically for any refund sanctioned beyond a period of three months. The jurisdictional Central Excise Officers are not required to wait for instructions from any superior officers or to look for instructions in the orders of higher appellate authority for grant of interest. Simultaneously, Board would like to draw attention to Circular No.398/31/98-CX, dated 2-6-98 [1998 (100) E.L.T. T16] wherein Board has directed that responsibility should be fixed for not disposing of the refund/rebate claims within three months from the date of receipt of application. Accordingly, jurisdictional Commissioners may devise a suitable monitoring mechanism to ensure timely disposal of refund/rebate claims. Whereas all necessary action should be taken to ensure that no interest liability is attracted, should the liability arise, the legal provision for the payment of interest should be scrupulously followed." (Em....