Custom, Excise & Service Tax Tribunal
Gautam Builders vs Chandigarh on 31 March, 2023
1
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH AT CHANDIGARH
SINGLE MEMBER BENCH
Service Tax Appeal No.60113/2022
(Arising out of Order-in-Appeal No.CHD-EXCUS-001-APP-96-2021-22
dated 3.1.2022 passed by the Commissioner of GST, CR Building, Plot
No.19, Sector 17C, Chandigarh.)
Gautam Builders Appellant
Vs.
CG & ST, Chandigarh Respondent
Present for the Appellant: Shri Atul Goyal, CA Present for the Respondent: Ms.Swati Chopra, AR CORAM: HON'BLE MR. S.S.GARG, MEMBER (JUDICIAL) FINAL ORDER NO.60088 /2023 Date of Hearing:19.01.2023 Date of Decision:31.03.2023 PER: S.S.GARG The appellant has filed appeal against the impugned order dated 3.1.2022 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has held that the appellant is eligible for interest on refund amount for the period from 24.10.2020 to 17.12.2020 only not from 14.9.2014 on which date he filed refund application.
2. Briefly facts of the case are that the appellant is engaged in providing erection, commissioning and installation services, construction of residential complex services and works contract services during the period under consideration. During the period 2 under consideration i.e. 2015-16, the appellant has discharged its liability by depositing service tax of Rs.80,20,869/- on the services provided during the said period. In Union budget, 2016, services provided to Government was exempted vide notification no.09/2016 dated 1.3.2016 under exemption entry S.No.12A. This exemption was given retrospective effect as per section 102 of the Finance Act, 2016. Accordingly, services provided by the appellant to the Government during the financial year 2015-16 stands exempted. Section 102 of the Finance Act, 2016 also provides for refund of amount so paid. Accordingly, the appellant filed an application for refund of service tax paid amounting to Rs.80,20,869/- on the said services on 14.9.2016 and submitted all the relevant documents and information as required for processing of refund application. The appellant has further alleged that during the proceeding, the appellant withdrew the service tax refund claim on the service tax amounting to Rs.48,49,115/- (out of refund application Rs.80,20,869/-). As the appellant has already charged service tax from those service recipients and has not refunded the service tax to the respective departments and thus the refund claim of the appellant, in the present case restricted to Rs.31,71,754/-. After due process, the Assistant Commissioner, Service Tax, Chandigarh vide its order dated 9.7.2018 rejected the refund claim of Rs.31,,71,754/-.
3. Aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals) who accepted the refund claim of Rs.31,71,754/- vide order dated 12.5.2020. Thereafter the Assistant Commissioner sanctioned the refund amounting to 3 Rs.30,20,628/- (after adjusting demand of Rs.1,51,126/- against delayed payment of service tax) vide order dated 9.10.2020 without granting any interest on delayed payment of refund amount.
4. Aggrieved by the said order of not granting interest by the Assistant Commissioner, the appellant filed appeal before the Commissioner (Appeals) praying for grant of interest as per section 11BB of Central Excise Act, 1944. Subsequently, the appellant received refund of Rs.30,20,628/- on 17.12.2020 but without any interest on delayed payment of refund.
5. Heard both the parties and perused the records.
6. Ld.CA appearing for the appellant submitted that as per law the appellant is entitled to claim interest on delayed payment of refund after expiry of 3 months from the date of filing of refund claim. He further submitted that in this case, he has filed refund application on 14.9.2016 whereas the Commissioner (Appeals) has wrongly observed that the appellant has filed refund claim on 23.7.2020. He further submits that the Commissioner (Appeals) has only granted interest on refund for the period from 24.10.2020 to 17.12.2020 whereas he is entitled to claim interest after expiry of three months from the date i.e. 14.9.2016 of filing of the refund claims. In support of his submissions, he relied on the following decisions:-
(1) Ranbaxy Laboratories Limited vs. Union of India-2011 (10) TMI 16 SC, (2) M/s.Ranjeev Steel Pvt.Ltd. vs.CCE & ST, Ludhiana-2020 (10) TMI 56 CESTAT- CHD (3) M/s.Steel Strips Ltd. vs. CCE & ST, Ludhiana-2018 (2) TMI CESTAT-CHD.4
7. On the other hand, Ld.DR reiterated the finding of the impugned order.
8. After considering the submissions of both parties and perusal of the record, I find that Union Budget, 2016 exempted services provided to Government under notification no.09/2016 dated 1.3.2016 under exemption entry S.No.12A. I also find that the appellant filed application for the refund of service tax paid amounting to Rs.80,20,869/- on the said services on 14.9.2016 and later on restricted his claim of refund to Rs.31,71,754/-, which was further reduced by the Assistant Commissioner to Rs.30,20,628/- and the same was finally received by the appellant on 17.12.2020 but without any interest. Further, I find that in the present case the only question before me is from which date the appellant is entitled to claim interest on delay payment of refund. This issue is no more res-intera as the same has been settled by Hon'ble Supreme Court in the case of M/s. Ranbaxy Laboratories Ltd. (supra) wherein Supreme Court after considering relevant provisions of section 11B and 11BB of Central Excise Act, 1944 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 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 5 (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. It is a well settled proposition of law that a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision; there is nothing to be read in; nothing to be implied and there is no room for any intendment. [See: Cape Brandy Syndicate v. Inland Revenue Commissioners, [1921] 1 K.B. 64 and Ajmera Housing Corporation & Anr. v. Commissioner of Income Tax, (2010) 8 SCC 739].
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 6 vague and unconvincing. In one case of consequential refund, 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.
2. In this connection. Board would like to stress that the provisions of section 11BB of Central Excise Act, 1944 are attracted automatically for any refund sanctioned beyond a period of three months. The jurisdictional Central Excise Officers are not required to wait for instructions from any superior officers or to look for instructions in the orders of higher appellate authority for grant of interest. Simultaneously, Board would like to draw attention to Circular No. 398/31/98-CX., dated 2-6-98 [1998 (100) E.L.T. T16] wherein Board has directed that responsibility should be fixed for not disposing of the refund/rebate claims within three months from the date of receipt of application. Accordingly, jurisdictional Commissioners may devise a suitable monitoring mechanism to ensure timely disposal of refund/rebate claims. Whereas all necessary action should be taken to ensure that no interest liability is attracted, should the liability arise, the legal provision for the payment of interest should be scrupulously followed."
(Emphasis supplied)
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 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 subsection (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 7 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."
The special leave petition is dismissed. No costs."
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.
9. By following the decisions of the Apex Court in the case of Ranbaxy Laboratories Ltd.(supra), this Tribunal in the case of M/s.Steel Strips Ltd. (supra) and M/s.Ranjeev Steel Pvt. Ltd. (supra) has held that the assessee is entitled to claim interest after 3 months from the date of application for refund claim till its realization.
10. In view of above discussions,, the appeal is allowed with consequential relief, if any.
(pronounced in the open court 31.03.2023) (S.S.GARG) MEMBER (JUDICIAL) mk 8