2007 (11) TMI 33 - AT - Service Tax

Interest on refund Refund claim had been disposed of within three months from the date of receipt of the CESTAT order No question of payment of interest arise Dept. action disposing claim is accordance with relevant Board s Circular dated 8.12.04 No case for granting interest

Summary

Issues:
Refund claim for Service Tax amount with interest denied by Assistant Commissioner. Appellants seek interest on refund amount post payment. Department argues refund processed within 3 months of CESTAT order receipt. Appellants cite case laws supporting interest payment.

Analysis:
The appellants filed a Miscellaneous Application seeking interest on a refund amount after the Assistant Commissioner sanctioned the Service Tax refund without interest. The appellants contended that the Tribunal's order allowed their appeal and they were entitled to interest on the refunded amount. They relied on various case laws to support their claim, including Sandvik Asia Ltd. v. CIT and Kuil Fireworks Industries v. CCE.

The Departmental Representative argued that the refund was processed within 3 months of receiving the CESTAT Final Order, in compliance with Circular No. 802/35/2004-CX. They contended that since the demand arose from an adjudication order set aside by CESTAT within three months, there was no justification for interest payment. The Department distinguished the case laws cited by the appellants to support their argument against granting interest.

Upon careful consideration, the Tribunal found that the refund was processed within the stipulated three months from the date of receiving the CESTAT order. As per the Board's Circular dated 8-12-2004, the Department's action was deemed appropriate. Therefore, the Tribunal rejected the appellants' Miscellaneous Application, stating that there was no strong case for granting interest on the refunded amount. The decision was made in accordance with the procedural guidelines and existing legal framework.

Overall, the Tribunal's judgment emphasized adherence to the prescribed timelines for refund processing and highlighted the significance of relevant circulars in determining the applicability of interest on refunded amounts. The case underscored the importance of procedural compliance and statutory provisions in addressing refund claims in the realm of indirect taxation.