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2019 (3) TMI 349 - HC - Service TaxInterest on delayed refund - relevant time for calculation of interest - Section 11BB of the Central Excise Act, 1944 - Held that - The petitioner is entitled to the interest as claimed. The writ petition is allowed in terms of prayer clause (a). The amount of interest in terms of the legal provisions and as per the prayer be released as expeditiously as possible and in any event by 30th April, 2019 - petition allowed.
Issues:
Claim for interest on delayed refund under Section 11BB of the Central Excise Act, 1944 read with section 83 of the Act. Analysis: The petitioner, engaged in Information Technology Software services, filed seven refund applications under Rule 5 of the CENVAT Credit Rules for the period July 2012 to June 2015. These applications were for availing credit on inputs/raw materials or input services used in exported services, aiming to earn foreign exchange. The refund was initially contested by the Revenue through a show cause notice, but eventually sanctioned based on a circular issued by the revenue. The petitioner then sought interest on the delayed refund through communications in January 2019, which went unanswered, leading to the filing of the writ petition. The Court heard arguments from both parties, with the petitioner supported by relevant statutory provisions and past judgments on similar controversies. The petitioner cited specific cases like Tien Yuan India Pvt. Ltd. vs. Union of India, National Leather Cloth Mfg. Co. vs. Union of India, Garden Silk Mills Ltd. vs. Union of India, and Tahnee Heights Co-op. Housing Society Ltd. vs. Union of India, where the issue of interest on delayed refunds was addressed. The respondents did not contest the applicability of these judgments but argued against accepting the petitioner's figures without scrutiny by the Revenue. After considering the arguments, the Court held that the petitioner is entitled to the interest claimed on the delayed refund. The writ petition was allowed, directing the release of the interest amount in accordance with legal provisions and the petitioner's claim. The Court set a deadline for the release of the interest amount by 30th April 2019 and made no order as to costs.
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