The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that no Interest is applicable for a period of delay in filing a Service Tax Refund Claim.
The appellant, M/s. Sivamurugan Chit Fund (P) Limited is engaged in chit fund business and after the introduction of negative taxation regime, they were compelled to pay Service Tax on the foreman charges collected for their chit fund activities for the period from 01.07.2012 to 31.05.2013.
The Adjudicating Authority, after issuing Show Cause Notice, rejected the refund claim as being hit by the limitation of time as prescribed under Section 11B of the Central Excise Act, 1944. On the first appeal, the First Appellate Authority also has rejected the appellant’s appeal, the present appeal has been filed before this forum.
The Coram of Judicial Member, P. Denesha ruled that it is the settled position of law that any judgment of the Hon’ble Supreme Court is the law of the land. Therefore, when the Hon’ble Supreme Court holds that there was no question of liability to Service Tax, then, any amount collected under the guise of Service Tax becomes a collection of the said amount without the authority of law and the Revenue can never, therefore, claim any right over such amount; the same will have to be refunded forthwith to the concerned person.
“There is no doubt that Section 11B prescribes the period of limitation for filing the refund claim, but admittedly here, the application for refund was filed on 19.01.2018; the date of the judgment of the Hon’ble Supreme Court is 07.01.2014. There is a clear four-year delay in filing the refund claim. My view, therefore, is that the appellant is not entitled to any interest in the delay caused by it. In other words, the appellant cannot take advantage of its own mistake of filing a delayed refund claim and thus cannot claim the interest for that delayed period during which time it slept over its rights,” the Tribunal noted.
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