2015 (7) TMI 68 - AT - Service Tax

Interest of delayed refund claim - Held that - Appellant had filed the refund claim on 25.03.2008 and he draws my attention to the copy of the refund claim filed by them with the appeal memorandum. In fact there is no dispute on this fact also since this was what started more than one round of litigation in this case. Therefore in my opinion this was the date that should have been considered for the purpose of claim for interest by the appellant by the learned Commissioner (Appeals). - 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) of the Central Excise Act and not on the expiry of the said period from the date on which order of refund is made. In this case the refund claim was filed in 2008 and interest also has to be considered on the basis of that date. - Decision in the case of Ranbaxy Laboratories Ltd. Versus Union Of India and Ors. 2011 (10) TMI 16 - Supreme Court of India followed. - Decided in favour of assessee.

Summary

Issues:
1. Refund claims rejection by Deputy Commissioner of Service Tax.
2. Classification of activities under "Commercial or Industrial Construction Services" or "Works Contract Services."
3. Eligibility of refund claim.
4. Rejection of fourth claim on merits and time bar issue.
5. Commissioner (Appeals) remand and subsequent orders.
6. Interest calculation and payment on refund claim.

Analysis:
1. The appellants filed four refund claims for service tax paid on construction services rendered to specific entities. The Deputy Commissioner of Service Tax rejected three claims initially, leading to an appeal to the Commissioner (Appeals), who remanded the issue for clear classification of activities under "Commercial or Industrial Construction Services" or "Works Contract Services" to decide refund claim eligibility.

2. The original adjudicating authority later classified the services under "Commercial or Industrial Construction Services," denying the refund. The fourth claim was also rejected by the lower authority on merits and time bar grounds. The Commissioner (Appeals-II) overturned these decisions, classifying the activities under Works Contract Service, making the appellants not liable for service tax pre-01.06.2007, allowing all appeals with consequential relief.

3. Subsequent to the Commissioner (Appeals) orders, the appellants applied for a refund of a specific amount. A dispute arose regarding interest calculation and payment. The Commissioner (Appeals) held that as the refund claim was settled within the specified period, no interest was payable. However, the appellants argued that the claim was filed earlier, citing a Supreme Court decision on interest liability commencement.

4. The learned CA for the appellant confirmed the filing date of the refund claim as 25.03.2008, supported by documentary evidence. Referring to the Supreme Court decision, it was established that interest liability commences from the date of the refund claim application. Consequently, the appeal was allowed, granting any consequential relief to the appellant based on the correct interest calculation date.

Conclusion:
The judgment addressed the rejection of refund claims, classification of services, eligibility for refund, time bar issues, and interest calculation disputes. The decision highlighted the importance of the date of the refund claim application for interest liability commencement, providing relief to the appellants based on legal precedent.