2016 (12) TMI 996 - AT - Service Tax

Refund claim - matter was remanded to the Adjudicating authority under N/N. 17/2009 ST dt 7/7/09 - Held that - appellant produced a certified copy of a Chartered Accountant certificate which was not provided before the Adjudicating authority. Further its is also observed that verification / co-relation was not possible before the first appellate authority on the basis of records produced before him. Under the circumstances bench does not find anything wrong with the remand proceedings ordered by the first appellate authority. Interest on delayed payment of refund - Held that - Notification No. 17/2009-ST dt 7/7/2009 does not have any interest payment clause on delayed payment of interest under the notification. Further the provisions of Sec 11B of the Central Excise Act 1944 are not made applicable to the refunds of Notification No. 17/2009-ST. Accordingly ordering of interest on refunds of Notification No. 17/2009-ST was not legal & is set aside. Appeal disposed off - decided partly in favor of Revenue.

Summary

Issues:
1. Jurisdiction of first appellate authority to remand the matter of refund under Notification No. 17/2009-ST.
2. Applicability of interest on delayed payment of refund under Notification No. 17/2009-ST.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Appeal (OIA) passed by the Commissioner (Appeals) remanding the matter of refund under Notification No. 17/2009-ST to the Adjudicating authority. The first appellate authority also ordered interest on delayed payment of the refund. The Respondent did not appear for the hearing, seeking adjournments on multiple occasions. The Tribunal observed that the issue was narrow and could not be further adjourned, hence proceeded with the disposal of the appeal.

2. The Revenue argued that the first appellate authority had no power to remand the case and that interest on the refund was not applicable under Notification No. 17/2009-ST as it did not refer to Sec 11B of the Central Excise Act 1944. However, after hearing the arguments and examining the case records, the Tribunal found that the appellant had submitted a Chartered Accountant certificate, which was not previously provided to the Adjudicating authority. The Tribunal also noted that verification was not possible based on the records before the first appellate authority. Therefore, the Tribunal upheld the remand proceedings ordered by the first appellate authority.

3. Regarding the issue of interest on delayed payment of the refund, the Tribunal found that Notification No. 17/2009-ST did not contain any clause for interest payment on delayed refunds. Additionally, the provisions of Sec 11B of the Central Excise Act 1944 were not applicable to refunds under Notification No. 17/2009-ST. Consequently, the Tribunal deemed the ordering of interest on such refunds as illegal and set it aside.

4. In conclusion, the appeal filed by the Revenue was allowed only to the extent indicated in the Tribunal's decision regarding the interest on delayed payment of the refund under Notification No. 17/2009-ST. The operative part of the order was pronounced in the open court by the Member (Technical) of the Appellate Tribunal CESTAT KOLKATA.