Service Tax Appeal No.10840 of 2022
(Arising out of OIA-VAD-EXCUS-002-APP-165-2022-23 dated 02/08/2022 passed by
Commissioner of Central Excise, Customs and Service Tax-VADODARA-II)
BOMBARDIER TRANSPORTATION INDIA PVT LTD
VERSUS
C.C.E. & S.T.-VADODARA-II
APPEARANCE:
Shri Mrugesh Pandya, Advocate for the Appellant
Shri Tara Prakash, Assistant Commissioner (AR) for the Respondent
CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR
HON’BLE MEMBER (TECHNICAL), MR. RAJU
Final Order No. A/ 10191 /2023
DATE OF HEARING: 10.01.2023
DATE OF DECISION: 01.02.2023
RAMESH NAIR
The issue involved in the present case is that whether the appellant is
entitled for the interest on refund already sanctioned.
- Shri Mrugesh Pandya, learned counsel appearing on behalf of the
appellant submits that the learned Commissioner (Appeals) has taken the
date of refund application as a letter dated 22.02.2022 submitted for refund
of service tax and applicable interest whereas, the refund application was
filed on 13.06.2011 which was rejected and the matter travelled up to this
tribunal. The Tribunal vide order No. A/12474/2021 dated 07.10.2021 on the
very refund matter allowed the appeal accordingly, the refund was
sanctioned which was filed way back on 13.06.2011. He submits that it is
settled law that the interest shall be payable after three months from the
date of filing of refund application. Therefore for the appellant is legally
entitled for the interest after expiry of three months from the date of filing
refund claim which in the present case is 13.06.2011. He placed reliance on
the following judgments:-
M/s. Ranbaxy Laboratory Ltd.- 2011 (273) ELT 3 (S.C.)
Manish Pharmo Plast Pvt. Ltd.- 2020 (374) ELT 145 (S.C.)
Harmdard (WAQF) Laboratories- 2013 (333) ELT 193 (S.C.)
Tata Chemicals Ltd.- 2016 (334) ELT 133 (Tri.-Ahmd.)
Tata Chemicals Ltd.- 2016 (334) ELT A53 (Guj.)
M/s. Comparex India Pvt. Ltd.- 2022 (11) TMI 2- CESTAT NEW DELHI
Reliance Industries Ltd.- vide order No.A/11315-11316/2022 dated
31.10.2022
Vikram Plastics- 2019 (370) ELT 1635 (Tri.-Ahmd.)
- Shri Tara Prakash, learned Assistant Commissioner (AR) appearing on
behalf of the revenue reiterates the finding of the impugned order.
- On careful consideration of the submission made by both the sides and
perusal of records, we find that there is no dispute that the appellant had
initially filed the refund application on 13.06.2011. It is this refund claim
which was rejected by the sanctioning authority and the matter had travelled
up to this Tribunal. This tribunal vide order No. A/12474/2021 dated
07.10.2021 allowed the appeal of the appellant. Consequent to this order,
the sanctioning authority has granted the refund, however, the interest was
not allowed. Learned Commissioner (Appeals) in the appellant’s appeal
before him rejected the claim of interest on the ground that the appellant
have claimed the refund after the tribunal’s order vide letter dated
22.02.2022 therefore, the refund was sanctioned within three months from
that date. The learned Commissioner (Appeals) also interpreted the
provision of Section 11BB of the Central Excise Act, 1944 and the circulars in
this context. After consideration of the finding of the learned Commissioner
(Appeals). We find that the learned Commissioner (Appeals) has gravely
erred in misinterpreting the overall provision and clarification of board
circular. The provision of Section 11BB is very clear, according to which the
claimant shall be entitled for the interest after expiry of three months from
the date of refund application. In the present case, the refund application
was admittedly filed on 13.06.2011 and it is this case which was under
litigation up to the tribunal and subsequently, the appellant succeeded in
this refund case only. In this case, the refund application was filed on
13.06.2011 shall be treated as refund application as mentioned under
Section 11BB.
4.1 As per the tribunal order, the appellant stand entitled for the refund
right from the date of application i.e. 13.06.2011 accordingly, the appellant
is legally entitled for the interest after the expiry of three months from the
date of refund application i.e. 13.06.2011. The judgment of Hon’ble
Supreme Court in the case of M/s. Ranbaxy Laboratory Ltd (supra) is directly
applicable in the facts of the present case. The relevant para of the said
judgment is reproduced below:-
- 9. It is manifest from the afore-extracted provisions that Section 11BB
of the Act comes into play only after an order for refund has been made
under Section 11B of the Act. Section 11BB of the Act lays down that in
case any duty paid is found refundable and if the duty is not refunded
within a period of three months from the date of receipt of the
application to be submitted under sub-section (1) of Section 11B of the
Act, then the applicant shall be paid interest at such rate, as may be
fixed by the Central Government, on expiry of a period of three months
from the date of receipt of the application. The Explanation appearing
below Proviso to Section 11BB introduces a deeming fiction that where
the order for refund of duty is not made by the Assistant Commissioner
of Central Excise or Deputy Commissioner of Central Excise but by an
Appellate Authority or the Court, then for the purpose of this Section the
order made by such higher Appellate Authority or by the Court shall be
deemed to be an order made under sub-section (2) of Section 11B of
the Act. It is clear that the Explanation has nothing to do with the
postponement of the date from which interest becomes payable under
Section 11BB of the Act. Manifestly, interest under Section 11BB of the
Act becomes payable, if on an expiry of a period of three months from
the date of receipt of the application for refund, the amount claimed is
still not refunded. Thus, the only interpretation of Section 11BB that can
be arrived at is that interest under the said Section becomes payable on
the expiry of a period of three months from the date of receipt of the
application under sub-section (1) of Section 11B of the Act and that the
said Explanation does not have any bearing or connection with the date
from which interest under Section 11BB of the Act becomes payable.
From the plain reading of the above observation of the Hon’ble Supreme
Court, we do not find any ambiguity on the position that if the refund is not
sanctioned within three months from the date of filing, the appellant is
entitled for the interest on the refund sanctioned. Accordingly, we are of the
considered view that in the present case also the appellant is legally entitled
for the interest on refund.
- Accordingly, the impugned order is set aside. Appeal is allowed.
(Pronounced in the open court on 01.02.2023 )
(RAMESH NAIR)
MEMBER (JUDICIAL)
(RAJU)
MEMBER (TECHNICAL)
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