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TMI Blog2024 (9) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... r the interest as per these orders would necessary be governed by the provisions of section 11BB and should be paid after expiry of three months from the date of receipt of the application for refund and not from the date of deposit as has been held by the original authority in the orders dated 09.07.2019 and 18.07.2019. Even if it is held that appellant was entitled to refund of interest as per section 35 FF then also the interest could not have been paid from the date of deposit, in view of the Proviso to section 35FF, which provided that in respect of the amounts deposited prior commencement of Finance (No. 2) Act, 2014 the provisions as contained in erstwhile section 35FF shall apply. Appellant is entitled to interest if any if the refund of the amount deposited was made beyond the period of three months from the date of refund application communicating the order in their favour to the jurisdictional Deputy/ Assistant Commissioner. In the present case the refund applications for refund of amount deposited under protest were allowed and the amounts paid vide order dated 11.06.2019 within a month of the receipt of the application. Thus appellant would not be entitled to any inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative for revenue. 3.2 Arguing for the appellant learned Chartered Accountants submits that:- It is undisputed that the amount paid by the appellant as service tax under protest during the course of litigation. When any amount paid under protest, it is neither pre- deposit nor service tax; it is only a deposit made by the appellant and the said amount was retained by the Revenue Authority without any authority of law. The amount retained by Revenue Authority under protest is violation of Article 265 of the Constitution of India. The amount retained by the revenue authority is liable to be refunded along with interest @ 12% p.a. from the date amount paid under protest till its realization. Similar views has been pronounce by the higher authority in the case of M/s Jalan Con Cast Ltd. Final Order No dated 12-01-2024 relying on the following decisions: Ebiz.com Pvt. Ltd. [2017 (49) S.T.R. 389(All)]. Alar Infrastructures Private Limited [2015 (40) S.T.R. 1066 (Del.)]. Oriental Insurance Company Limited [2023 SCC Online Del 6505] KVR Construction 2010 SCC Online Kar 5419. Shahi Export Ltd. [Appeal No 60376 of 2020 by Regional Bench- Court No.1 of CESTAT, Chandigarh vide order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR-7 Challan No Date Amount (Rs) Date of refund sanctioned Period of Interest Amount of Interest Year Days 1 25.10.10 31611 11.06.19 8 229 16363 2 08.11.10 100000 11.06.19 8 215 51534 3 00037 25.10.10 254550 11.06.19 8 229 131766 Total 386161 199664 1 00055 16.11.10 202948 11.06.19 8 207 104321 2 00039 24.12.10 269728 11.06.19 8 169 136963 Total 472676 241284 Grand Total 440947 4.5 Further I find that in the similar issue, the Assistant Commissioner. Central Goods Service Tax, Division-ll, Bareilly has allowed refund Rs.1,51,966/- with interest Rs.9,293/., totaling Rs 1,61,259/- vide his Order-In- Original No. 23/Refund/ST/2017-18 dated 19.03.2018 to M/s Bajaj Infrastructure Development Company Limited, Barkhera Kalan, District - Pilibhit (UP,). 4.6 Further I find that as per Section 35FF - Interest on delayed refund of amount deposited under Section 35F, Where an amount deposited by the appellant under section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below five per cent. and not exceeding thirty-six per cent. per annum as is for the time being fixed by the Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund claim is not hit by the provisions of last proviso section 142(3) of CGST Act 2017. 4.3 I find that the issue involved in the present case is no longer res-integra and is squarely covered by the decisions of Hon ble Supreme Court as follows: A. Ranbaxy laboratories Ltd. [2011 (273) E.L.T. 3 (S.C.)] 12. Thus, ever since Section 11BB was inserted in the Act with effect from 26th May 1995, the department has maintained a consistent stand about its interpretation. Explaining the intent, import and the manner in which it is to be implemented, the Circulars clearly state that the relevant date in this regard is the expiry of three months from the date of receipt of the application under Section 11B(1) of the Act. 13. We, thus find substance in the contention of learned counsel for the assessee that in fact the issue stands concluded by the decision of this Court in U.P. Twiga Fiber Glass Ltd. (supra). In the said case, while dismissing the special leave petition filed by the revenue and putting its seal of approval on the decision of the Allahabad High Court, this Court had observed as under : Heard both the parties. In our view the law laid down by the Rajasthan High Court succin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (60) G.S.T.L. 3 (S.C.)] 18. Coming back to the present cases, the relevant provision has prescribed rate of interest at 6 per cent where the case for refund is governed by the principal provision of Section 56 of the CGST Act. As has been clarified by this Court in Modi Industries Ltd. and Godavari Sugar Mills Ltd. wherever a statute specifies or regulates the interest, the interest will be payable in terms of the provisions of the statute. Wherever a statute, on the other hand, is silent about the rate of interest and there is no express bar for payment of interest, any delay in paying the compensation or the amounts due, would attract award of interest at a reasonable rate on equitable grounds. It is precisely for this reason that paragraph 9 of the decision in Godavari Sugar Mills Ltd. accepted the submission made by the Learned Counsel for the respondents and confined the rate of interest to the prescription made in the statute. The award of interest at a rate in excess of what was prescribed by the statute was only for a period beyond 20 years where the matter was not strictly covered by the statute and as such it would be in the realm of discretion of the Court. It must also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd for additional duty as well as proposing penal action again against the noticees for having violated the provisions of an exemption notification. The petitioner asserts that during the pendency of those proceedings, it was also forced to deposit an amount of Rs. 20,00,000. The SCNs were ultimately finalized in terms of the order in original dated 08 February 2008. 4. In terms of the aforesaid order, the Additional Commissioner confirmed the duty demand of Rs. 45,31,574 /- under Section 11A of the 1944 Act and held the petitioners liable to pay the same along with interest thereon in accordance with Section 11AB of the 1944 Act. Further directions were framed for confiscation of cash amounting to Rs. 44,96,000/- and the imposition of monetary penalties amounting to Rs. 45,31,574/-. The amount of Rs. 20,00,000/- which had been deposited by the petitioners during the pendency of the SCN proceedings was also appropriated against the demands which stood crystallized. 5. Aggrieved by the aforesaid order, the petitioner preferred an appeal. That appeal came to be allowed in toto by the Appellate Authority in terms of its judgment dated 31 December 2008. The Department is stated to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against: Provided that the amount required to be deposited under this section shall not exceed Rupees Ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No. 2) Act, 2014. Explanation. For the purposes of this section duty demanded shall include, (i) amount determined under Section 11-D; (ii) amount of erroneous CENVAT credit taken; (iii) amount payable under Rule 6 of the CENVAT Credit Rules, 2001 or the CENVAT Credit Rules, 2002 or the CENVAT Credit Rules, 2004.] Section 35-FF. Interest on delayed refund of amount deposited under Section 35-F. Where an amount deposited by the appellant under Section 35-F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below five per cent and not exceeding thirty- six per cent per annum as is for the time being fixed by the Central Government, by notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion when it is stated that a deposit which is made in compliance with a statutory pre-condition for the preferment of an appeal cannot be viewed as duty . It is the aforesaid aspect which appears to have weighed with the Board in proceeding to formulate its directive for refunds being effected immediately upon an appeal coming to be decided in favour of the assessee and not being made dependent upon any application being made in respect thereof. 27. The aforesaid position stands further fortified when one reads Section 35FF of the 1944 Act. As would be evident from a reading of that provision, Section 35FF as distinct from Section 11B does not require the making of a formal application by the assessee. In fact and contrary to Section 11B, the said provision uses the expression .there shall be paid to the appellant interest .. . Thus, the language of Section 35FF is an embodiment of the manifest obligation of the respondents to refund the pre-deposit consequent to an order passed by the Appellate Authority notwithstanding an application having not been made by the depositor. 28. The distinction between Sections 11B and 35FF is also evident when one bears in mind the language employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ek to emphasize here is that in the present case, the issue of refund is duly regulated by two statutory provisions whose prescriptions would necessarily have to be adhered to. However, for reasons aforenoted we find ourselves unable to endorse the observation appearing in Para 34 of the report where a deposit of duty and a pre deposit were considered to be identical concepts. As was noted hereinbefore, a pre-deposit made as a condition of filing an appeal is in any case not considered to be duty even by the respondents. 32. The decision of this Court in Team HR Services, had frowned upon the distinction sought to be advocated by the respondents there between a deposit made under protest and a pre-deposit made in connection with an appeal. As would be further evident from a reading of Paras 14 and 15 the counsel appearing for the respondents had also failed to draw the attention of the Court to any statutory provision which governed the issue of refund. The aforesaid decision is thus clearly distinguishable especially when undisputedly, in the present matters the issue of refund is governed by the provisions of Sections 11B and 11BB. 4.5 Thus in terms of the above decisions undispu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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