Dept liable to pay Interest from Date of Expiry of 3 months from Date of Receipt of application for Refund under CENVAT Credit Rules: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi Bench had ruled that the department is liable to pay  interest from the date of expiry of 3 months from date of receipt of application for refund under CENVAT Credit Rules.

The appellant, M/s. Ozone Plant Design Service Private Limited registered itself with the Department under the taxable category of “consultancy engineering services” defined under section 65(31) of the Finance Act, 1994 and made taxable under section 65(105)(g) of the Finance Act. The appellant exported consultancy engineering services to various overseas clients, including M/s. Wasco Engineering Technology PTE Limited, Singapore for whom the services were provided to M/s. Cairn India Limited situated at Barmer in Rajasthan for and on behalf of Wasco Engineering.

The order passed by the Assistant Commissioner was assailed by the appellant before the Commissioner (Appeals). The contentions advanced on behalf of the appellant that it was also entitled for refund on the services rendered to Wasco Engineering and non issuance of a show cause notice for denying any part of the refund claim had also rendered the order bad in law were rejected by the Commissioner (Appeals). However, the contention of the appellant that it was entitled for interest on the amount of refund sanctioned by the Assistant Commissioner was remitted to the adjudicating authority.

The coram headed by the President Justice Dilip Gupta and P.Anjani Kumar has held that Section 83 of the Finance Act makes applicable the provisions of sections 11B and 11BB of the Excise Act in relation to service tax as they apply in relation to duty of excise. Thus, the provisions of section 11B and 11BB of the Excise Act would also be applicable and so would the decision of the Supreme Court in Ranbaxy Laboratories. “The impugned order dated 26.08.2016 passed by the Commissioner (Appeals) to the extent it rejects the refund of Rs. 68,02,513/- is set aside. The appellant would be entitled to refund of this amount with interest in terms of section 11BB of the Central Excise Act, 1944. The appeal is, accordingly, allowed,” the CESTAT observed

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