2018 (11) TMI 1520 - AT - Service Tax

Interest on the amount of refund already sanctioned - Section 11BB of the Central Excise Act, 1944 - period 01.09.2004 to 31.03.2008 - Held that - It is a settled position of law that interest under Sec. 11BB should be allowed to the assessee whenever there is delay in sanctioning the refund beyond the period of three months from the date of filing of the application for refund - the interest amount may be recalculated at the appropriate rates and the interest should be granted to the appellant forthwith. Refund of Service Tax with Interest - period involved is from 01.09.2004 to 30.09.2007 - Time limitation - Held that - The period between 01.06.2007 to 30.09.2007 falls beyond the period of limitation of one year and accordingly the service tax paid during that period is refundable. The demand of ₹ 2,95,001/- pertaining to period 01.06.2007 to 30.09.2007 on limitation was set aside by the Tribunal and hence the amount is refundable to the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Delay in sanctioning refund claim and eligibility for interest under Sec. 11BB of the Central Excise Act, 1944.
2. Refund claim including service tax and interest amount beyond the time limit.

Analysis:

Issue 1: Delay in sanctioning refund claim and eligibility for interest under Sec. 11BB
The appellant filed an appeal (ST/30777/2018) regarding the interest claim on a refund already sanctioned within the period from 01.09.2004 to 31.03.2008. The Tribunal noted a delay in sanctioning the refund claim beyond the three-month period from the filing date. It was established that the appellant was entitled to interest at the applicable rate as per Sec. 11BB of the Central Excise Act, 1944. The appellant claimed an amount of &8377;52,915, and it was ruled that interest should be recalculated at the appropriate rates and granted to the appellant promptly.

Issue 2: Refund claim including service tax and interest amount beyond the time limit
Another appeal (ST/30778/2018) was made by the appellant concerning a refund claim of &8377;2,95,001, comprising service tax of &8377;2,67,898 and interest of &8377;27,103, for the period from 01.09.2004 to 30.09.2007. The Tribunal recognized the settled legal principle that demands confirmed beyond the time limit of 1/5 years cannot be upheld. In this case, the demand for &8377;2,95,001 for the period 01.06.2007 to 30.09.2007 exceeded the limitation period of one year, making the service tax paid during that period refundable. Consequently, the Tribunal set aside the demand for &8377;2,95,001, and ruled that the amount was refundable to the appellant.

In conclusion, the impugned orders were set aside, and both appeals filed by the appellant were allowed by the Tribunal. The operative part of the order was pronounced in open court upon the conclusion of the hearing.