2023 (4) TMI 504 - AT - Service Tax

Non-sanction of interest on delayed refund - rate of interest - HELD THAT - This issue has been considered by the Tribunal in various cases and it has been consistently held that the assessee is entitled to claim interest from the date of deposit till the date of payment at the rate of 12% - Further, this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS M/S RIBA TEXTILES LIMITED 2022 (3) TMI 693 - PUNJAB HARYANA HIGH COURT after considering the various decisions held that the assessee is entitled to claim interest from the date of payment of initial amount till the date of its refund and granted the interest at the rate of 12% per annum. The arguments of the Revenue that M/S PARLE AGRO PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA 2017 (2) TMI 984 - CESTAT ALLAHABAD has been challenged before the Hon‟ble Allahabad High Court and the appeal has been admitted will not help the Revenue in any way as no stay has been granted against the said decision. Further, the main thrust of the argument of the Ld. DR that in the present case the duty has been deposited voluntarily and not under protest also does not have any force because consistently it has been held that any amount that is deposited during pendency of the adjudication proceedings or investigation is in the nature of deposit made under protest as held by the Madras High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL 2015 (3) TMI 735 - MADRAS HIGH COURT , COMMISSIONER, CENTRAL EXCISE 7-A, ASHOK MARG, LUCKNOW VERSUS M/S EVEREADY INDUSTRIES INDIA LTD. 2017 (2) TMI 197 - ALLAHABAD HIGH COURT . Appeal allowed.

Summary

Issues Involved:
1. Non-sanctioning of interest on the refund sanctioned by the department.
2. Rate of interest on delayed refund.

Summary:

Non-Sanctioning of Interest on the Refund Sanctioned by the Department:

The appellant, engaged in providing Visa Consultancy Services, had a dispute with the department regarding the taxability of referral services. To avoid interest and penalty, the appellant deposited Rs. 25,39,804/- under protest during the investigation. The Tribunal decided in favor of the appellant, dropping the demand, and the appellant subsequently filed for a refund. The department sanctioned the refund but denied interest on it. The appellant's appeal for interest was rejected by the Ld. Commissioner (Appeals) on the grounds that the refund was sanctioned within three months from the date of filing the refund application.

Rate of Interest on Delayed Refund:

The appellant argued that the amount paid under protest should be refunded with interest from the date of deposit. The Tribunal has consistently held that interest should be granted from the date of deposit till the date of payment at 12% per annum. The Tribunal cited various decisions, including those of the Kerala High Court and the Ahmadabad Tribunal, supporting the appellant's claim. The Tribunal rejected the revenue's argument that the amount was not paid under protest and highlighted that any amount deposited during adjudication or investigation is considered under protest. The Tribunal concluded that the appellant is entitled to interest at 12% per annum from the date of deposit till the date of payment.

Conclusion:

The impugned order was set aside, and the appeal was allowed, granting the appellant interest at 12% per annum on the delayed refund from the date of deposit till the date of payment.