2024 (10) TMI 722 - AT - Service Tax

Interpretation of statute - amended provisions of Section 35F and 35FF post-06.08.2014 - eligibility for interest sanctioned (on pre-deposit) - pre-deposit amount is related to appeal filed prior to 06.08.2014 - HELD THAT - The entire amount was deposited by the appellant on 08.01.2015 and 17.01.2015 which has been claimed as refund by the appellant. There is no dispute in respect of the deposit made or the date of deposit. At least impugned order do not record any other date of pre-deposit. It is not even the case of revenue that these amounts have been deposited prior to 06.08.2014 i.e. the date of commencement of Finance (No 2) Act, 2014. From proviso to the Section 35F, it is evident that the said section, categories the amounts deposited under Section 35F in two categories, (i) deposited prior to 06.08.2014, the date of Commencement of Finance (No 2) Act, 2014 (ii) deposited post 06.08.2014, the date of Commencement of Finance (No 2) Act, 2014. In respect of the amounts deposited post 06.08.2014, the provisions of the amended section 35 FF will be applicable and in respect of amounts deposited prior to 06.08.2014, the provisions of erstwhile section 35FF as it stood prior to date will apply. It is settle principle of interpretation that the statute should be interpreted in accordance with the words used in the statute. By circular no 1053/02/2017-CX dated 10.03.2017 Board has clarified that ' Where the appeal is decided in favour of the party/assessee, he shall be entitled to refund of the amount deposited along with the interest at the prescribed rate from the date of making the deposit to the date of refund in terms of Section35FF of the Central Excise Act, 1944 Since the said Circular has been issued without any qualification it would not be open to authorities subordinate to introduce qualification as has been sought to by the impugned order and not apply the said circular.' There are no merits in the impugned order - appeal allowed.

Summary

Issues Involved:

1. Legality of granting interest on the refund of pre-deposit under Section 35FF of the Central Excise Act, 1944.
2. Applicability of the amended provisions of Section 35F and 35FF post-06.08.2014.
3. Interpretation of statutory provisions in the context of pending appeals and stay applications prior to the amendment.

Issue-wise Detailed Analysis:

1. Legality of Granting Interest on Refund of Pre-deposit:

The primary issue was whether the interest on the refund of the pre-deposit was legally sanctioned under Section 35FF of the Central Excise Act, 1944. The adjudicating authority originally granted interest on the pre-deposit amount, which was contested by the revenue. The revenue argued that the interest was not legally and properly sanctioned because the pre-deposit was related to an appeal filed before the amendment on 06.08.2014, and interest was only payable for delays beyond three months in granting refunds before this date. The impugned order found that the respondent was not eligible for interest under Section 35FF as the matter related to a period before the amendment, thus setting aside the adjudicating authority's order granting interest.

2. Applicability of Amended Provisions of Section 35F and 35FF Post-06.08.2014:

The appellant contended that since the entire pre-deposit was made after the amendment date of 06.08.2014, the provisions of the amended Section 35FF, which allow for interest from the date of deposit, should apply. The impugned order, however, interpreted the statutory provisions to mean that the pre-deposit related to appeals and stay applications pending before the amendment should be governed by the provisions as they stood prior to the amendment. The order concluded that since the appeal was filed and the stay application was pending before the amendment date, the pre-deposit was subject to the old provisions, which did not allow for interest unless there was a delay in refund beyond three months.

3. Interpretation of Statutory Provisions in Context of Pending Appeals:

The judgment emphasized the interpretation of statutory provisions, particularly the provisos to Sections 35F and 35FF. The impugned order interpreted the proviso to mean that the provisions of the amended section do not apply to cases where appeals and stay applications were pending before the amendment. The appellant argued that the plain language of the statute should be followed, which categorizes deposits made post-06.08.2014 as subject to the amended provisions. The judgment referenced the principle of statutory interpretation that clear and unambiguous words in a statute should be given effect as per their plain meaning, as supported by the Supreme Court's decision in Dilip Kumar & Co. The tribunal found that the impugned order misinterpreted the statutory provision by not applying the amended section to deposits made after the amendment date, even if related to pending appeals.

Conclusion:

The tribunal concluded that the impugned order lacked merit and failed to correctly apply the statutory provisions. It set aside the order, allowing the appeal and reinstating the adjudicating authority's decision to grant interest on the pre-deposit from the date of deposit. The judgment underscored the importance of adhering to the plain language of statutory provisions and the principle of judicial discipline.