2022 (11) TMI 750 - AT - Service Tax

EOU - Interest for delayed refund - quantum of correct period of delay - Rule 5 of Cenvat Credit Rules read with Notification No. 27/2012-ST dated 28.06.2012 - HELD THAT - Undisputedly the appellant has filed their refund claims during the period 09.10.2015 to 23.03.2016. These dates are verified from the evidences available on record. Accordingly, the appellant is entitled to interest from the end of three months from the date of receipt of application by the Department (as mentioned hereinabove) and such interest shall be payable till the date i.e. 04.06.2020 (date of sanction of refund). The Adjudicating Authority is directed to grant the amount of interest within a period of 45 days from the date of receipt of copy of this order - the appeal is allowed.

Summary

Issues involved:
1. Grant of interest for delayed refund for the correct period of delay.

Analysis:
The appeal in this case revolves around the question of whether interest for delayed refund has been rightly granted for the correct period of delay. The appellant, an Export Oriented Unit (EOU) engaged in the manufacture and export of specific goods, filed refund claims for different periods between October 2014 and August 2015. Initially, the refund claim was rejected, but upon appeal, the Commissioner (Appeals) allowed the refund claim. The Revenue challenged this decision before the Tribunal, which upheld the Commissioner's decision. Subsequently, the appellant requested a refund with interest, which was partially granted without interest as per Section 11BB of the Central Excise Act.

The main contention raised by the appellant was regarding the period for calculating interest under Section 11BB. The appellant argued that the interest should be calculated from the date of the original refund application filed between November 2015 and March 2016, rather than the reminder date of 07.08.2019 after the Tribunal's final order. The Commissioner (Appeals) acknowledged the appellant's entitlement to interest under Section 11BB but miscalculated the period for interest. Despite the appellant's application for rectification being rejected, the appellant appealed to the Tribunal seeking the correct calculation of interest as per the law.

Upon careful consideration of the arguments presented, the Tribunal examined the evidence and confirmed that the appellant had indeed filed refund claims between October 2015 and March 2016. Consequently, the Tribunal held that interest should be granted from three months after the date of receipt of the original refund application until the date of refund sanction in June 2020. The Tribunal allowed the appeal, modified the impugned order, and directed the Adjudicating Authority to disburse the interest amount within 45 days from the date of the Tribunal's order.

In conclusion, the Tribunal's decision clarified the correct period for calculating interest on delayed refund claims under Section 11BB of the Central Excise Act, ensuring that the appellant receives the appropriate interest amount in accordance with the law.