2008 (7) TMI 536 - AT - Service Tax

Interest on delayed refund- the assessee had claimed the refund claim along with interest and had filed their plea before the Commissioner. The issue was decided against the assessee. Held that- Commissioner (Appeals) cannot now raise ground that rate of interest in terms of notification was 15%. Matter should have been agitated before High Court. Too old in the day to raise issue now. Amount already paid to assessee. Impugned order set aside.

Summary

Issues:
1. Calculation of interest rate under Section 11BB of the Central Excise Act.
2. Interpretation of judgments by the Tribunal and the High Court of Andhra Pradesh regarding the rate of interest.
3. Discrepancy between the rate of interest claimed by the assessee and the rate specified in the Official Gazette.
4. Validity of the Commissioner's order restricting the rate of interest to 15% per annum.

Analysis:
1. The appeal in question arises from a previous Order-in-Appeal that restricted the interest rate to 15% per annum as per Section 11BB of the Central Excise Act. The assessee had initially claimed a refund with interest, leading to a series of decisions culminating in a Tribunal order allowing the interest claim based on judgments, including one by the High Court of Andhra Pradesh.

2. The Tribunal directed the authorities to pay interest as per the High Court's order, which was challenged by the Revenue in a subsequent Writ Petition. The Divisional Bench of the Andhra Pradesh High Court upheld the assessee's claim for 24% interest, emphasizing that the rate should be as claimed and approved in previous orders.

3. The Revenue argued that the rate of interest should align with the Official Gazette's Notification, which specified 15%. However, the Tribunal and the High Court of Andhra Pradesh had already approved the interest calculation at 24%, and the amounts had been paid to the appellants accordingly.

4. Considering the history of the case and the consistent rulings in favor of the assessee, the Tribunal found that the Commissioner's order restricting the interest rate to 15% was unjustified. The Tribunal emphasized that the issue of interest rate had been settled in previous orders and upheld by the High Court, rendering the Commissioner's objection outdated. The appeal was allowed, and the impugned order was set aside.