2016 (2) TMI 812 - AT - Service Tax

Claim of refund of interest on service tax demand paid earlier - period of limitation to claim interest - Held that - since the appellant for the first time had filed the application, claiming refund of interest paid vide its letter dated 15.09.2010, paid during the period 18.12.2008 to 29.04.2009, in my opinion, the same is barred by limitation of time, being filed beyond the period of one year from the relevant date. Further there is no document available on record to prove that the interest amount was paid by the appellant under protest. - Decided against the assessee.

Summary

Issues:
Refund claim rejection for interest amount based on time limitation under Section 11B of Central Excise Act, 1994.

Analysis:
The appeal challenges the rejection of a refund claim for interest amount by the adjudicating authority, upheld by the Commissioner (Appeals), due to being filed beyond the prescribed time limit. The appellant, a service tax registrant for Business Auxiliary Service, received commission in foreign currency for connecting Indian clients to foreign suppliers. The appellant deposited service tax and interest on export of services, seeking a refund under CBEC Circular No.111/05/2009-ST. While the service tax refund was granted, the interest refund claim was rejected for being filed after one year from the relevant date.

The appellant argued that the interest refund application was a continuation of an earlier application and should not be time-barred under Section 11B. The Department contended that the refund claim exceeded the one-year limit and was not paid under protest. The adjudicating authority rejected the claim solely on the basis of the late filing, without evidence of protest payment by the appellant.

The Tribunal found that the appellant's initial application did not mention the interest amount refund, which should have been claimed along with the duty refund under Section 11B. As the interest refund claim was filed separately after the one-year limit, it was deemed time-barred. Additionally, no proof existed of the interest payment being made under protest. Consequently, the refund application was deemed not maintainable under Section 11B, upholding the Commissioner's decision and dismissing the appellant's appeal.

In conclusion, the Tribunal upheld the rejection of the interest refund claim due to time limitation, emphasizing the necessity to include interest claims along with duty refund applications under Section 11B. The absence of evidence of protest payment further weakened the appellant's case, leading to the dismissal of the appeal.