Custom, Excise & Service Tax Tribunal
Z Konark vs -Bbsr Commissionerate on 7 January, 2025
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.2
Service Tax Appeal No. 76497 of 2024
(Arising out of Order-In-Appeal No. 64/ST/BBSR-GST/2021 dated 25.11.2021
passed by Commissioner (Appeals), GST, Central Excise & Customs, Bhubaneswar)
M/s. Z. Konark
(Plot No. M-4/34, Acharya Vihar, Bhubaneswar-751013, Odisha)
Appellant
VERSUS
Commr. of CGST & Central Excise, BBSR
(C. R. Building, Rajaswa Vihar, Bhubaneswar, Odisha-751002
Respondent
APPEARANCE :
Mrs Shreya Mundhra & Sreemoyee Gangopadhyay, both Advocates for the Appellant Mr. S. K. Dikshit, Authorized Representative for the Respondent CORAM:
HON'BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL) HON'BLE MR. K. ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO.75013/2025 Date of Hearing : 18 December 2024 Date of Decision: : 07/01/2025 PER R. MURALIDHAR:
The appellant is engaged in the business of construction of residential buildings and subsequent sale thereof. No Service Tax was being paid by them since they held a bonafide belief that no Service Tax is payable on such activities. The Department viewed that the service was liable to tax during the impugned period. In view of pressure from the Department, the Appellant paid the Service Tax of Rs. 25,33,720/- (Rs. 17,28,454/- on 30.03.2006 and Rs.8,05,266/-
on 05.07.2006). The Appellant had also submitted the protest letter dated 28.03.2006 wherein it is clearly mentioned that, the payment 2 Service Tax Appeal No. 76497 of 2024 was being made under protest. Finally, the issue got clarified that the Service Tax is payable from 1.7.2010 only.
2. The appellants filed their refund claim for Rs.25,33,720 on 22.11.2007. The Revenue issued SCN on 14.01.2008, seeking to know as to why the refund claim should not rejected. After due process, vide OIO dated 14.11.2008, the refund claim was rejected. Being aggrieved the appellants filed their appeal before the Commissioner (Appeals), who upheld the OIO and dismissed the appeal filed by the appellant. Against this OIA, the appellant filed their appeal before the Tribunal, which vide Final Order No. FO/76835-76838/2018 dated 29-10-2018, held that no Service Tax was required to be paid during the impugned period and remanded the matter back to the Adjudicating authority to verify the claim of the appellant about making their payment „Under Protest‟.
3. In pursuance to the above mentioned CESTAT Order, the Appellant vide letter dated 01.02.2019, has submitted an application along with acknowledged original copy of protest letter dated 28.03.2006 and requested the refund to be granted. Out of the total refund of Rs. 25,33,720/-, the Asst Commissioner granted the refund of Rs. 17,28,454/-. In respect of the balance amount of Rs. 8,05,266/-, he has rejected the claim on the ground that no separate "under protest"
letter has been filed by the Appellant. In respect of the refund of Rs.17,28,454 no interest was paid to the appellant on the ground that the refund was granted within 3 months from the date of order of the 3 Service Tax Appeal No. 76497 of 2024 Tribunal. Being aggrieved, the appellants filed their appeal before the Commissioner (Appeals), who has dismissed their appeal. Being aggrieved, the appellant is before the Tribunal.
4. The Ld Counsel appearing for the appellant makes the following submissions:
A. AS PER SECTION 11BB OF THE CENTRAL EXCISE ACT, 1944 THE APPELLANT IS ENTITLED TO RECEIVE INTEREST ON DELAYED REFUND OF DUTY AFTER THE EXPIRY OF THREE MONTHS FROM THE DATE OF RECEIPT OF REFUND APPLICATION U/S 11B (1).
(1) In the instant case, the Appellant had paid the payment of Rs. 17,28,454/- on 30.03.2006 under protest due to constant pressure and persuasion from the Department and filed a refund application for the same on 22.11.2007. However, the aforesaid amount was refunded only on 23.7.2019. Therefore, the provision of interest on delayed refund would apply from the date of filing of refund application.
(2) The Appellant submits that as per Section 11BB of the Central Excise Act, 1944, if any duty ordered to be refunded under Section 11B(2) to any applicant is not refunded within three months from the date of receipt of application, interest shall be paid to that applicant on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of duty. The relevant provision of the said Section is extracted here-under-below:4
Service Tax Appeal No. 76497 of 2024 "SECTION 11BB. Interest on delayed refunds.- If any duty ordered to be refunded under sub-section (2) of Section- 11B to any applicant is not refunded within three month from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, [not below five percent] and not exceeding thirty percent per annum as is for the time being fixed [ by the Central Government, by notification in the official Gazette], on such duty from the date immediately after the expiry of three month from the date of receipt of such application till the date of refund of duty :
(3) The Appellant submits that, in terms of Section 11BB of the Central Excise Act, 1944, they are entitled to receive interest on the delayed refund from 22.2.2008 (three months from the date of application for refund letter filed before the Department i.e. 22.11.2007 in this case) to 23.7.2019 i.e. the date of refund.
(4) Further, the Appellant submits that the explanation under Section 11BB of the Central Excise Act, 1944 specifically states that where any order of refund is made by the Commissioner (Appeals) or Appellate Tribunal, against an order of the Assistant Commissioner/Deputy Commissioner of Central Excise under section 11B(2), the order passed by the Commissioner (Appeals) or Appellate Tribunal as the case may be, shall be deemed to be an order passed under the section 11B(2). The aforesaid explanation is reproduced herein as under:
"Explanation. - Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal 5 Service Tax Appeal No. 76497 of 2024 or any court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal National Tax Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purpose of this section."
(5) In the present case, since the Hon‟ble CESTAT has allowed the refund to the Appellant, the order of the Hon‟ble CESTAT would be deemed to be an order passed under Section 11B(2) in terms of the above-mentioned explanation. Thus, the Appellant is entitled to interest on delayed refund in terms of Section 11BB of the Central Excise Act, 1944. (6) In this regard, the Appellant relies on the order of the Apex court in the case of Ranbaxy Laboratories Ltd. Vs. UOI reported at 2011 (273) E.L.T 3 (S.C.) wherein the Apex Court has held that, the provisions of interest under Section 11BB are attracted automatically for refund sanctioned after an expiry of beyond a period of three months from the date of receipt of application for refund.
(7) Further, reliance is placed in the case of Commissioner of C. Ex., Pune- II vs. Sulaki Chemicals Pvt. Ltd. reported in 2014 SCC OnLine Bom 5031: (2014) 310 ELT 511 wherein the Hon‟ble High Court of Bombay has held that, the appellate order allowing the refund of duty relates back to the order of the original authority and therefore by virtue of 6 Service Tax Appeal No. 76497 of 2024 substantive Section 11BB of the Central Excise Act, 1944 interest on the refund amount has to be paid from the date immediately after three months from the date of receipt of the application to the original authority till the refund of authority.
(8) Further, reliance is placed on the case of IDL Explosives Ltd. Vs. Commissioner of GST, CX & Customs,
Bhubaneswar reported at 2019(10) TMI 1412, wherein the Hon'ble CESTAT, Kolkata has said that, it will not be correct to consider the date of refund application filed by the Appellant as the date when the Appellant is further requesting the adjudicating authority to grant the refund as a result of favorable order received from the Higher Authority/ higher forum. The application date for the purpose of calculating interest on delayed refund shall be the date when the Appellant first submitted the refund application.
(9) The Appellant further places reliance on the case of M/s. Tengapani Tea Estate, M/s. Betjan Tea Estate, and M/s. Jutlibari Tea Estate Vs. Commissioner of CGST & CX, Dibrugarh Commissionerate reported at 2021 (9) TMI 22 , wherein it has been held the date of initial filing of the refund claim has to be considered and not the date of the order passed by the Tribunal.
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Service Tax Appeal No. 76497 of 2024
5. On the basis of all the above judicial pronouncements, the Appellant most submits that, the Appellant is entitled to receive interest on the delayed refund from the date 22.02.2008 (i.e. immediate three months from the date of receipt of refund application letter by the Department which is 22.11.2007 in this case) till the date of receipt of refund i.e. 23.7.2019 in terms of Section 11BB of the Central Excise Act, 1944.
(B)THE APPELLANT IS ENTITLED TO RECEIVE INTEREST @ 12% P.A. BE TILL THAT DATE OF REFUND ON ACCOUNT OF DELAYED REFUND OF DUTY.
(1) It has been held in the following case laws that the refund is required to be granted along with interest @ 12% per annum :
o Parle Agro Pvt. Ltd. v. Commissioner 2022 (380) ELT 219 (Tri.-All) o Riba Textiles Ltd. Village Chidana, Tehsil Gohana Distt. Sonepat, Haryana v. Commissioner of Central Excise and Service Tax, Panchkula 2022 (62) GSTL 136 (P&H) (2) In view thereof, interest at the rate of 12% is liable to be paid to the Appellant from the date of payment „under protest‟ 30.03.2006 till the same has been refunded by way of the Order in Original.
6. In view of the above submissions, the Ld. Advocate prays that impugned order may be set aside and the appeal may be granted directing the Revenue to pay the interest from the date of initial 8 Service Tax Appeal No. 76497 of 2024 payment of amount on 30.6.2006 till it was refunded to them, with interest rate of 12 % per annum.
7. The Ld. A R, representing the Revenue, submits that the refund was granted within 3 months from the date of the Final order passed by the Tribunal. Thus, the condition imposed under Section 11BB has been fulfilled. Accordingly, he justifies the denial of interest by the lower authorities.
8. We have heard both the side and we have gone through the appeal papers, written submissions and other documents placed before us.
9. The issue to be decided in this case is the date from which the interest would be payable by the Revenue and the rate of interest thereon.
10. We find that the issue is no more res integra. The Hon‟ble Supreme Court in the case of Ranbaxy Laboratories Ltd. Vs. UOI reported at 2011 (273) E.L.T 3 (S.C.), has held as under :
The core issue which confronts us in all these appeals relates to the question of commencement of the period for the purpose of payment of interest, on delayed refunds, in terms of Section 11BB of the Central Excise Act, 1944 (for short "the Act"). In short, the question is whether 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 or on the expiry of the said period from the date on which the order of refund is made?9
Service Tax Appeal No. 76497 of 2024 The appellant filed certain claims for rebate of duty, amounting to Rs.4,84,52,227/- between April and May 2003. However, the Assistant Commissioner of Central xcise, vide order dated 23rd June 2004, rejected the claim. Aggrieved, the appellant filed an appeal before the Commissioner, Central Excise (Appeals), who by his order dated 30th September 2004 allowed the appeal and sanctioned the rebate claim. Being aggrieved by the said order, the revenue filed an appeal before the Joint Secretary, Government of India, Ministry of Finance, but without any success. Ultimately rebate was sanctioned on 11th January, 2005. On 21st April 2005, appellant filed a claim for interest under Section 11BB of the Act on account of delay in payment of rebate Section 11BB, the pivotal provision, reads thus:
"11BB. Interest on delayed refunds.- If any duty ordered to be refunded under sub- section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent and not exceeding thirty per cent per annum as is for the time being fixed by the Central Government, by Notification in the Official Gazette, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty :
Provided that where any duty ordered to be refunded under sub-section (2) of section 11B in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty.10
Service Tax Appeal No. 76497 of 2024 Explanation : Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal or any Court against an order of the Assistant Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, by the Court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section."
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 11 Service Tax Appeal No. 76497 of 2024 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.
11. At this juncture, it would be apposite to extract a Circular dated 1st October 2002, issued by the Central Board of Excise & Customs, New Delhi, wherein referring to its earlier Circular dated 2nd June 1998, whereby a direction was issued to fix responsibility for not disposing of the refund/rebate claims within three months from the date of receipt of application, the Board has reiterated its earlier stand on the applicability of Section 11BB of the Act. Significantly, the Board has stressed that the provisions of Section 11BB of the Act are attracted "automatically" for any refund sanctioned beyond a period of three months. The Circular reads thus:
"Circular No.670/61/2002-CX, dated 1-10-2002 F.No.268/51/2002-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Non-payment of interest in refund/rebate cases which are sanctioned beyond three months of filing - regarding I am directed to invite your attention to provisions of section 11BB of Central Excise Act, 1944 that wherever the refund/rebate claim is sanctioned beyond the prescribed period of three months of filing of the claim, the interest thereon shall be paid to the applicant at the notified rate. Board has been receiving a large number of representations from claimants to say that interest due to them on sanction of refund/rebate claims beyond a period of three months has not been granted by Central Excise formations. On perusal of the reports received from field formations on such representations, it has been observed that in majority of the cases, no reason is cited. Wherever reasons are given, these are found to be very vague and unconvincing. In one case of consequential refund, 12 Service Tax Appeal No. 76497 of 2024 the jurisdictional Central Excise officers had taken the view that since the Tribunal had in its order not directed for payment of interest, no interest needs to be paid.
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 succinctly in the case of J.K. Cement Works v. Assistant Commissioner of Central Excise & Customs reported in 2004 (170) E.L.T. 4 vide Para 33:
"A close reading of Section 11BB, which now governs the question relating to payment of interest on belated payment of interest, makes it clear that relevant date for the purpose of determining the liability to pay interest is not the determination under sub- section (2) of Section 11B to refund the amount to the applicant and not to be transferred to the Consumer Welfare Fund but the relevant date is to be determined with reference to date of application laying claim to refund. The non- payment of refund to the applicant claimant within three months from the date of such application or in the case governed by proviso to Section 11BB, non-payment within three months from the date of the commencement of Section 11BB brings in the starting point of liability to pay interest, notwithstanding the date on which decision has been rendered by the competent authority as to whether the amount is to be transferred to Welfare Fund or to be paid to the applicant needs no interference."13
Service Tax Appeal No. 76497 of 2024
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.
11. In the case of Atmiya Engineering and Plastics Vs CCE & ST Vadodara, vide FINAL ORDER NO. A/ 10311 /2022, has followed the Ranbaxy judgement and has held as under :
In case of Ranbaxy Laboratories Ltd., Hon‟ble Supreme Court held as under
" 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 14 Service Tax Appeal No. 76497 of 2024 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."
10. In view of the above settled position by the Hon‟ble Supreme Court if there is any delay in sanction of the refund claim from the date of filing application, the appellant is entitled for the interest from the date of filing of refund claim till the date of sanction.
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11. The Revenue‟s contention is that they have granted the refund within three months form the date of Commissioner (Appeals) order. In this regard, I am of the view that once the Commissioner (Appeals) has allowed the refund, the appellant was entitled for the refund right from the date of filing of the application. Therefore, for the purpose of interest, it is not the date of Commissioner (Appeals) order, but it is the date of filing of refund application needs to be taken.
12. In the case of Tengapani Tea Estate, M/s. Betjan Tea Estate Vs. Commissioner of CGST & CX, Dibrugarh Commissionerate - 2021 (9) TMI 22, this Bench has held as under :
"Since the claim for refund/exemption filed by the Appellants in 2008 was eventually adjudicated in favour of the Appellants in 2019, it is evident that there was a delay in the processing of the refund in favour of the Appellants. The Original Authority and the Appellate Authority have proceeded on the premise that the communication dated 27 February 2019 is a claim for refund, which is factually incorrect - The said communication dated 27 February 2019 by the Appellants is only forwarding and inviting the attention of the jurisdictional refund sanctioning authority to the Final Order dated 9 July 2018 passed by this Tribunal and cannot be construed as a fresh claim ................................16
Service Tax Appeal No. 76497 of 2024 It is settled by the decision of the Hon'ble Supreme Court in Ranbaxy Laboratories case [2011 (10) TMI 16 - SUPREME COURT] that the said period has to be reckoned from the date of the application for exemption/refund, which in the instant case is 10 January 2008, and not the date of the adjudication or appellate order sanctioning the refund........................"
13. Therefore, following the ratio laid down in the above case laws, we hold that the appellant is eligible for the interest taking the refund claim date as the base. The appellant has filed the refund claim on 22.11.2007. Hence after considering the period of 3 months for processing of this application, the interest would be payable from 22.02.2008 till the date on which the refund has been paid to them.
14. Now, we take up the issue of the rate of interest to adopted. We find that this issue also stands decided in several cases.
15. The Allahabad Bench, in the case of Parle Agro Pvt Ltd Vs CCGST, Noida - 2022(380) ELT 219 (Tri-All), has held as under:
29. Section 11BB provides for interest on delayed refund. It states that if any duty ordered to be refunded under sub-section (2) of Section 11B is not refunded within three months from the date of receipt of the application, then the applicant shall be entitled to interest after the expiry of three months from the date of receipt of the application at such rate not below 5% and not exceeding 30% as may be notified by the Central Government in the Official Gazette.
In the present case, the provisions of Section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as 17 Service Tax Appeal No. 76497 of 2024 noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the order dated 31-1-2017, which order has attained finality. In this connection reference can also made to the decisions of the Allahabad High Court in Pace Marketing Specialities and Ebiz.Com Private Limited, wherein after making reference to the decision of the Supreme Court in Sandvik Asia Ltd., the High Court granted interest at the rate of 12% per annum in matters relating to refund of amount deposited during investigation and adjudication. In Riba Textiles, the Tribunal also granted interest at the rate of 12% on refund of amount deposited during investigation and at the time of entertaining the stay application.
In view for the aforesaid decisions, and the fact that the rate of interest varies from 6% to 18% in the aforesaid Notifications issued under Sections 11AA, 11BB, 11DD and 11AB of the Excise Act, the grant of interest @ 12% per annum seems to be appropriate. Thus, for the reason stated above, Excise Appeal No. 70628 of 2019 is allowed and the order dated 28-5-2019, passed by the Commissioner (Appeals) is modified to the extent that interest shall be granted to the appellant @ 12% instead of @ 6% from the date of deposit till the date of payment.
16. In Churchit Interntional Vs CC (Export), vide Final Order No.58537/2024 dated 6.9.2024, the Delhi Tribunal has held as under :
The Appellant was made to deposit Rs.50,00,000/- involuntarily under threat of arrest during investigation on 18.03.2014.18
Service Tax Appeal No. 76497 of 2024 Thereafter, Assistant Commissioner of Customs (Refund) vide Order-in-Original No.045/2021 dated 24/12/2021 allowed the refund of Rs. 50,00,000/-but had not granted interest on the said amount.
5. Having heard both the parties and after perusing the record it is worth noting that amount of Rs.50,00,000/- was deposited much before issuance of show cause notice and adjudication order did not confirm any demand against the appellant and thus the said amount was never appropriated against any demand.
There was no demand against the appellant and accordingly such collection of amount was without authority of law.
15. This Tribunal in the case of M/s. Parle Agro Pvt. Ltd. Vs. Commissioner, Central Goods & Service Tax, Noida (vice- Versa) reported as 2021 (5) TMI 870 - CESTAT ALLHABAD has held that in the light of the above discussed notifications the grant of interest at the rate of 12% per annum seems to be appropriate. Tribunal Delhi (CESTAT) also in the case of Duggar Fibre Pvt. Ltd. Vs. Commissioner of C. Ex., Cus. & CGST, Delhi reported as 2021 (378) ELT 293 (Tri.-Del.) wherein the adjudicating authority was ordered to grant interest @ 12% per annum from the date of deposit till the date of refund. The relevant Para is reproduced as under:
"I further take notice that Divisioin Bench of this Tribunal in Parle Agro (P) Ltd. Vs. ommissioner, CGST - 2021-TIOL-306-CESTAT ALL, wherein interest on pre-deposit (made during investigation) have been enhanced from 6% to 12%, following the ruling of the Apex Court in Sandvik Asia Ltd. Vs. Commissioner - 2006 (196) E.L.T. 257 (S.C.). I further direct the Adjudicating Authority to grant interest @ 12% per annum from the date of deposit till the date of refund. Such interest should be granted within a period of two months from the date of receipt or service of the copy of this order."19
Service Tax Appeal No. 76497 of 2024
16. Similar view was taken in case of Pr. Commr. of CGST, New Delhi Vs. Emmar Mgf Construction Pvt. Ltd. reported as 2021 (55) GSTL 311 (Tri.-Del.) wherein it was held that amount deposited during investigation and/or pending litigation is ipso facto pre-deposit and interest is payable on such amount to the assessee being successful in appeal, from the date of deposit till the date of refund. Further, it is directed that the adjudicating authority shall disburse the amount of interest @ 12% per annum forthwith.
"8. Considering the rival contentions, this appeal by the Revenue is dismissed. Further, it is directed that the Adjudicating Authority shall disburse the amount of interest @12% per annum forthwith, within a period of 45 days from the date of receipt of the copy of this order, as held by Division Bench of this Tribunal in Parle Agro (P) Ltd., (supra)."
19. Consequent to the entire above discussion, the findings of the order under challenge are upheld with respect to holding appellant entitled for getting refund of the amount along with interest. However, it is held that the appellant is entitled to have interest on the amount of refund sanctioned at the rate of 12% per annum to be calculated from the date of the deposit of the amount till the date refund thereof. Resultantly, the present appeal is hereby allowed.
17. Following the ratio of the cited case laws of Parle Agro and Churchit, we hold that the appellant would be eligible for interest @ 12% per annum.
18. Accordingly, we set aside the impugned order and hold as under :
(a) The interest is required to be paid from three months from the date of the initial filing of the refund claim till the date of granting the refund.20
Service Tax Appeal No. 76497 of 2024
(b) The interest is to be paid @ 12% per annum
(c) Interest to be paid within 8 weeks from the date of communication of this order.
19. Appeal stands allowed accordingly.
(Pronounced in the open court on 07/01/2025) Sd/-
(R. Muralidhar) Member (Judicial) Sd/-
(K. Anpazhakan) Member (Technical) Pooja