2023 (5) TMI 896 - HC - Service Tax

Grant of interest on the amount which was sanctioned as refund - Power of tribunal to grant interest - Refund of amount includes amount deposited with the Registrar of High Court - calculation of relevant period for which interest is to be paid. - HELD THAT - There may not be any necessity to examine the effect of the CESTAT Procedure dated 17th July 2009 qua the order passed by the learned Tribunal dated 14th December, 2020 as the period during which the orders were reserved by the Tribunal would fall during which lockdown was imposed and the Hon'ble Supreme Court had also extended the period of limitation under various statutes. Therefore, on the said ground, the order passed by the learned Tribunal cannot be held to be non est in law. That apart, no such substantial question of law has been suggested by the revenue in this appeal. Having steered clear of this issue, now we need to consider as to whether the learned Tribunal was justified in granting interest at the rate of 10%. If the Assistant Commissioner of Central Excise is empowered to grant interest, it goes without saying that such power was enure in favour of the appellate authority namely, the Commissioner of Central Excise as well as the Tribunal which will test the correctness of the order passed by the Commissioner and also this Court, in exercise of power under Section 260A of the Income Tax Act. Therefore, there is sufficient power vested with the Tribunal considering the facts and circumstances of the case to grant interest. However, in this case the facts are exceptional and peculiar. More particularly, because of the earlier round of litigation before this Court - such right to claim interest not only emanates from the statutory provision of Section 11BB of the Central Excise Act but also pursuant to the orders passed by this Court in the writ petition filed by the respondent/assessee before this Court. Quantum of interest at the rate of 10% - HELD THAT - The total interest which was sanctioned and refunded to the respondent/assessee is Rs. 59,85,338/-. If that be so, then the present appeal will be hit by the monetary limit fixed by the CBIC in its Circular dated 22nd August, 2019 which fixed the monetary limit of Rs. 1 crore for the revenue to pursue appeals before this Court against the order passed by the Tribunal. Therefore, on that score also the revenue is liable to be non suited. That apart there is nothing on record to indicate that the case on hand would fall within any one of the exception which have been curved out in the circular issued by the CBIC. There is no question of law arising for consideration in this appeal - Appeal dismissed.

Issues Involved:
1. Jurisdiction of the Tribunal to entertain grounds not part of the original adjudication.
2. Perversity and per incuriam nature of the Tribunal's order directing payment of interest.
3. Tribunal exceeding its jurisdiction by failing to appreciate the High Court's order regarding non-payment of interest.
4. Legality of the Tribunal's decision rendered after a significant delay.
5. Tribunal's power to grant interest under Section 11BB of the Central Excise Act.
6. Applicability of CBIC's monetary limit for appeals.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal:
The revenue questioned whether the Tribunal was right in entertaining a ground related to the payment of interest on the entire amount deposited, which was not part of the original adjudication order. The Tribunal's jurisdiction is generally limited to examining the impugned Order-in-Original. However, the Tribunal considered the entire history of the case, including the writ petition and subsequent orders, to decide on the interest issue.

2. Perversity and Per Incuriam Nature of the Tribunal's Order:
The revenue argued that the Tribunal's order was perverse and per incuriam as it directed the payment of interest for the period from the date of deposit with the Government until the amount was transferred to the Registrar General of the High Court. The Tribunal found that the appellant was entitled to interest on the amounts deposited with the Government from the date of deposit until the date of transfer to the Registrar General, as the appeal was allowed and the demand confirmed by the Commissioner was set aside.

3. Tribunal Exceeding its Jurisdiction:
The revenue contended that the Tribunal exceeded its jurisdiction by not appreciating the High Court's order dated 14th August 2019, which stated that no interest was payable on the entire amount deposited. The Tribunal, however, noted that the proceedings before it were a continuation of the earlier litigation and that the right to claim interest emanated from both the statutory provision of Section 11BB of the Central Excise Act and the orders passed by the High Court.

4. Legality of the Tribunal's Decision Rendered After Delay:
The revenue submitted that the Tribunal's decision rendered on 14th December 2020, after hearing arguments on 17th January 2020, was contrary to the CESTAT Procedure and should be held non est. The Court found no necessity to examine this issue in-depth, considering the lockdown period and the Supreme Court's extension of limitation periods. Additionally, no substantial question of law on this issue was suggested by the revenue.

5. Tribunal's Power to Grant Interest:
The Court held that the Tribunal had sufficient power to grant interest, as even the Assistant Commissioner is empowered to grant interest under Section 11BB of the Central Excise Act. The Tribunal's decision to grant interest was justified by the statutory provisions and the earlier orders of the High Court, which directed the payment of interest if the respondent/assessee succeeded in the writ petition.

6. Applicability of CBIC's Monetary Limit for Appeals:
The Court noted that the total interest sanctioned and refunded to the respondent/assessee was Rs. 59,85,338/-, which is below the monetary limit of Rs. 1 crore fixed by the CBIC for pursuing appeals before the Court. Therefore, the appeal was non-suited based on the monetary limit, and there was nothing to indicate that the case fell within any exceptions outlined in the CBIC circular.

Conclusion:
The appeal (CEXA/9/2021) was dismissed as there was no substantial question of law arising for consideration. Consequently, the connected application for stay (IA No. GA/1/2022) was also closed.

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