Custom, Excise & Service Tax Tribunal
Capgemini Technology Services India ... vs Commissioner Of Central Goods & Service ... on 7 April, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 60646 of 2023
[Arising out of Order-in-Appeal No. 32/ST/CGST-APPEAL-GURUGRAM/SKS/2023-
24 dated 30.06.2023 passed by the Commissioner (Appeals), CGST, Gurugram]
Capgemini Technology Services India Ltd ......Appellant
1st Floor & 3rd Floor (2508 sqft.), Bldg No. 6,
Candor Gurgaon One Realty Projects Pvt Ltd,
IT/ITES SEZ Village Tikri,
Sector 48, Gurugram, Haryana 122018
VERSUS
Commissioner of Central Goods & Service ......Respondent
Tax, Gurugram Plot No. 36-37, Sector 32, Gurugram, Haryana 122001 APPEARANCE:
Shri Mihir Mehta, Advocate for the Appellant Shri Shivam Syal, Authorized Representative for the Respondent CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO. 60475/2025 DATE OF HEARING: 27.02.2025 DATE OF DECISION: 07.04.2025 S. S. GARG:
The present appeal is directed against impugned order dated 30.06.2023 passed by the Commissioner (Appeals), whereby the learned Commissioner (Appeals) has rejected the prayer of appellant for interest on refund.
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2. Briefly stated facts of the present case are that the appellant is a company incorporated under the Companies Act, 1956 and is registered as a Special Economic Zone Unit. The original refund application was filed by Liquidhud Analytics Pvt Ltd, the subsidiary of the appellant, which was subsequently merged with the appellant pursuant to the order dated 24.06.2021 passed by the NCLT, Mumbai Bench. The present appeal is filed by the present appellant. During the period under dispute i.e. January 2017 to March 2017 and April 2017 to June 2017, the appellant was engaged in carrying out authorized operations with regard to provision of IT/ITES services and for undertaking these operations, the appellant procured various services which were part of its list of approved services used for authorized operations issued by the Development Commissioner. The appellant did not avail Cenvat Credit of service tax paid on procurement of these specified approved services in accordance with Cenvat Credit Rules, 2004. As the appellant during the relevant period has claimed exemption by way of refund on service tax paid on specified services used for authorized operations in accordance with Notification No. 12/2013-ST dated 01.07.2013. Subsequently, the appellant filed the refund application before the Assistant Commissioner. The Assistant Commissioner after scrutiny of refund claims, issued a deficiency memo dated 07.03.2018 which was replied by the appellant. Thereafter, another deficiency memo dated 18.06.2018 was issued requesting the appellant for submission of additional information/document. Deficiency memo dated 18.06.2018 was received by the appellant on 28.06.2018 and 3 ST/60646/2023 was replied on 29.06.2018 alongwith the requested information/document. Thereafter, the Assistant Commissioner vide Order-in-Original dated 29.11.2018 rejected the refund claim made by the appellant. Aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals) who vide Order-in-Appeal dated 31.05.2019 set aside the said Order-in-Original and remanded the matter back to the Adjudicating Authority for fresh adjudication on merits. Subsequent to the above, the Assistant Commissioner vide Order-in-Original dated 29.06.2020 sanctioned the refund of Rs.1,57,64,564/-, however, no interest on delayed sanction of refund was granted to the appellant. Aggrieved by the said order, the appellant filed appeal before the learned Commissioner (Appeals) on 31.10.2022 for grant of interest from expiry of three months from the date of application till payment of refund in terms of Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. But the learned Commissioner (Appeals) vide the impugned order dismissed the appellant's appeal on the ground that refund is sanctioned within three months from the date of application considering the date of filing as 04.05.2022. Hence, the present appeal.
3. Heard both the parties and perused the material on record.
4. The learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed denying the interest in violation of the statutory provision under Section 11BB of the Central Excise Act, 4 ST/60646/2023 1944 as well as by ignoring the precedent decisions on this issue. He further submits that it is incumbent upon both the authorities below to grant interest on the delayed sanction of refund. He also submits that this issue is no more res integra and has been settled in the following decisions:
Ranbaxy Laboratories Ltd vs. UOI - 2011 (273) ELT 3 (SC) UOI vs. Hamdard (Waqf) Laboratories - 2016 (333) ELT 193 (SC) Om Refoils Ltd vs. UOI - 2018 (361) ELT 98 (P&H) Capgemini Technology Services India Ltd vs. UOI - 2019 (366) ELT 208 (Bom.) M & G Global Services India Ltd vs. UOI - 2023 (383) ELT 39 (Bom.) Jindal Drugs Ltd vs. UOI - 2019 (367) ELT 591 (Bom.) Blackberry India Pvt Ltd vs. Asst Commr CE & CGST, New Delhi - 2023 (8) TMI 353 (Delhi High Court) Netapp India Pvt Ltd vs. Commr of Cen. Tax, Bengaluru East - 2019 (2) TMI 581 (CESTAT Bangalore) : affirmed by Karnataka High Court - 2019 (367) ELT 145 Capgemini Technology Services India Ltd vs. CCE & CGST, Bangalore-I - 2022 (2) TMI 559 (CESTAT Bangalore) Champion Flavours Meerut vs. CGST, Jammu - 2023 (5) TMI 1188 (CESTAT Chandigarh)
5. On the other hand, the learned Authorized Representative for the Revenue reiterates the findings of the impugned order.
6. After considering the submissions made by both the parties and perusal of the material on record, we find that the only issue involved in the present case is whether the appellant is entitled for interest on delayed sanction of refund or not? We find that this issue is no more res integra as the Tribunal as well as the High Courts and 5 ST/60646/2023 the Supreme Court have settled this issue in the decisions cited above.
7. We also find that the Hon'ble Bombay High Court in the appellant's own case reported in 2019 (366) ELT 208 (Bom.) has allowed the interest on delayed sanction of refund. Relevant finding of the Hon'ble High Court recorded in para 7 is reproduced herein below:
"7. After hearing both sides and perusing the writ petition and the annexures thereto so also the decisions rendered by this Court, we are of the opinion that the petitioner is entitled to the interest as claimed. The writ petition is allowed in terms of prayer clause (a). The amount of interest in terms of the legal provisions and as per the prayer be released as expeditiously as possible and in any event by 30th April, 2019. There would be no order as to costs."
8. We also find that Hon'ble Punjab & Haryana High Court in the case of Om Refoils Ltd (supra) has held that interest is payable immediately after expiry of three months from the date of application. Relevant findings of the Hon'ble High Court recorded in para 13 & 14 are reproduced herein below:
"13. Even assuming that the petitioner furnished the evidence with respect to the issue of unjust enrichment later it would make no difference as Section 27A mandates the payment of interest from the date of the application. The Revenue in any case does not suffer any loss as it has the benefit of the use of the money, in fact, even prior to the date of the filing of the application for refund under Section 27(1).
14. The petition is, therefore, allowed. The petitioner shall be paid interest from 23-10-2007 i.e. 90 days after the date of the application under Section 27(1) viz. 23-7-2007 till payment. The same shall be paid by 15-4-2018. There shall however be no order as to costs."
6 ST/60646/2023
9. We also find that Hon'ble Apex Court in the case of Ranbaxy Laboratories Ltd (supra) has held that interest is payable on the amount refunded to the assessee from the expiry of three months from the date of application till the date of payment of the amount of refund sought under Section 11B of the Central Excise Act. Relevant findings of the Hon'ble Apex Court recorded in para 14, 15 & 16 are reproduced herein below:
"14. At this stage, reference may be made to the decision of this Court in Shreeji Colour Chem Industries (supra), relied upon by the Delhi High Court. It is evident from a bare reading of the decision that insofar as the reckoning of the period for the purpose of payment of interest under Section 11BB of the Act is concerned, emphasis has been laid on the date of receipt of application for refund. In that case, having noted that application by the assessee requesting for refund, was filed before the Assistant Commissioner on 12th January 2004, the Court directed payment of Statutory interest under the said Section from 12th April 2004 i.e. after the expiry of a period of three months from the date of receipt of the application. Thus, the said decision is of no avail to the revenue.
15. In view of the above analysis, our answer to the question formulated in para (1) supra is that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made.
16. As a sequitur, C.A. No. 6823 of 2010, filed by the assessee is allowed and C.A. Nos. 7637/2009 and 3088/2010, preferred by the revenue are dismissed. The jurisdictional Excise officers shall now determine the amount of interest payable to the assessees in these appeals, under Section 11BB of the Act, on the basis of the legal position, explained above. The amount(s), if any, so worked out, shall be paid within eight weeks from today."
10. Further, we find that as per Section 11BB of the Central Excise Act, 1944, the interest is payable after the expiry of three months from the date of receipt of the application.
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11. In view of our discussion above and by following the ratios of the decisions cited above, we are of the considered opinion that the appellant is entitled to get the interest from the expiry of three months from filing the first application seeking refund at the rate as prescribed under the law. The original authority is directed to compute the interest after the expiry of three months from the date of filing the original application seeking refund at the rate which is prescribed as per rules.
12. The appeal is, accordingly, allowed.
(Order pronounced in the open court on 07.04.2025) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) RA_Saifi