2019 (4) TMI 908 - AT - Service Tax

Withdrawal of refund claim - delay in processing the claim - Held that - The matter of fact is that the appellants have duly filed refund claim claiming refund of the amount deposited by them as per the demand confirming against them, when the same was set aside by CESTAT. No explanation has been put forth by the Revenue as to why the said refund claim was not adjudicated upon for nearly two years. No explanation comes forth from either the order of the adjudicating authority or from the order of Commissioner(Appeals). Delay in processing the claim filed by the appellant is enough reason to allow the Appeal in favour of the appellant. If the said refund claim was adjudicated then appellant would have been entitled not only to refund of amount deposited but also to interest as per Section 11BB of Central Excise Act, 1944. Appeal allowed - decided in favor of appellant.

Summary

Issues: Delay in refund claim adjudication, Demand raised post withdrawal of refund claim

The judgment addresses two main issues. Firstly, it discusses the delay in adjudicating the refund claim filed by the appellant after the demand against them was set aside by CESTAT. The appellant had deposited an amount in cash, seeking a refund later on. However, the refund claim remained unaddressed for almost two years, without any explanation provided by the Revenue for the delay. The Tribunal notes that if the claim had been processed in a timely manner, the appellant would have been entitled not only to the refund but also to interest as per Section 11BB of the Central Excise Act, 1944. The delay in processing the claim is considered a valid reason to allow the appeal in favor of the appellant.

Secondly, the judgment deals with the demand raised by the Revenue almost one and a half years after the appellant withdrew their refund claim and utilized the deposited amount to discharge their service tax liability. The Tribunal finds that this demand, along with interest, made post withdrawal of the refund claim, is not within the prescribed period of limitation. As a result, the Tribunal sets aside the order of the Commissioner (Appeals) and allows the appeal, concluding that there are no merits in the impugned order.

In conclusion, the Tribunal highlights the importance of timely adjudication of refund claims and adherence to the prescribed period of limitation for raising demands post withdrawal of such claims. The judgment emphasizes the need for Revenue to provide explanations for delays and ensures that appellants are not unfairly burdened due to procedural lapses.