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2023 (12) TMI 484 - AT - Service TaxInterest on refund denied - relevant date - HELD THAT - Hon ble Apex Court s decision in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS 2006 (1) TMI 55 - SUPREME COURT , relied upon by the various judgments cited by the appellants, is distinguishable on the facts that in the case of Sandvik Asia, the refund was granted inordinately in a delayed manner i.e. after 20 years. The provisions regarding interest as provided in the Central Excise Act prevail and this Tribunal cannot intervene as regards the date from which the interest is payable or as regards the rate of interest, so far as refunds under Central Excise Act, 1944 are concerned. Appeal dismissed.
Issues involved: Refund of service tax, interest on refund, statutory provisions for interest on refund.
Refund of service tax: The case involved M/s G.S. Promoters and Developers who had not paid service tax amounting to Rs.75,95,723 as per a search conducted by DGCEI. The Commissioner of Central Excise confirmed the non-payment, but the appellants won the appeal. They applied for a refund of Rs.25 Lakhs deposited during the investigation, which was sanctioned by the Assistant Commissioner. However, the issue arose when interest on the refund was not granted by the Commissioner (Appeals). Interest on refund: The appellants argued that interest should be paid at a rate of 12% from the date of deposit, citing various cases in support. The Department, on the other hand, referred to statutory provisions under Section 11B/11BB of the Central Excise Act, 1944, and Notification No.67/2003-CE (NT) prescribing a 6% interest rate per annum. They also highlighted court judgments emphasizing that interest cannot be granted beyond statutory provisions. Statutory provisions for interest on refund: The Tribunal analyzed the arguments presented by both parties and referred to relevant judgments, including those of the Hon'ble Apex Court. It was concluded that the provisions in the Central Excise Act regarding interest prevail, and the Tribunal cannot intervene in determining the date or rate of interest payable on refunds under the Act. As a result, the appeal for interest on the refund was rejected. The judgment was pronounced on 11/12/2023 by Mr. P. ANJANI KUMAR, Member (Technical) at the Appellate Tribunal CESTAT CHANDIGARH.
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