A two judge bench of the Supreme Court has upheld the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) order in a case involving Blackberry India Pvt. Ltd. The bench held that interest is payable immediately after expiry of three months from the dates on which those applications were made for the filing of interest.
The Respondent, Blackberry India Pvt. Ltd. had challenged the order issued by the Adjudicating Authority, specifically contesting the denial of interest under Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, pertaining to the refunded amount.
During the relevant period, the respondent, among other activities, had provided services to Blackberry Singapore Pte. Ltd., an overseas entity. The petitioner had asserted that the services rendered to Blackberry Singapore Pte. Ltd. qualified as the export of services under the Service Tax Rules, 1994, making it eligible for a refund of unutilized Cenvat Credit.
Upon the non-processing of these claims, the Adjudicating Authority issued a Show Cause Notice on 22.01.2020, proposing the rejection of the petitioner’s refund claim on the premise that the place of provision of services was within India. According to the Adjudicating Authority, despite the recipient being situated outside India, the petitioner, as an intermediary, provided the services within India. Subsequently, the Adjudicating Authority issued an Order-in-Original on 31.08.2020, rejecting the refund claim based on the aforementioned grounds.
Revenue had refuted this claim, citing that the petitioner’s refund application was processed within three months from the receipt of its letter , considered as an application for refund under Section 11BB of the Excise Act read with Section 83 of the Finance Act.The central issue revolved around the petitioner’s plea for interest on the refunded amount.
CESTAT had agreed with the respondent’s demand of interest. Observing that “. There is no cavil that the petitioner would be entitled to the interest in terms of Section 11BB of the Excise Act from the date immediately after the expiry of three months from the date of receipt of an application for refund. However, the Adjudicating Authority has failed to consider that the petitioner had filed its applications of refund on 28.03.2013, 31.03.2014 and 30.06.2014 for the tax periods April-June 2012, April-June 2013, and July-September 2013 respectively. And the interest payable to the petitioner is required to be calculated from the date immediately after expiry of three months from the dates on which those applications were made.”
The two judge bench comprising B.R.Gavai and Sandeep Mehta found no reason to interfere with the impugned judgment and order passed by the Custom Excise Service Tax Appellate Tribunal. The civil appeal was set aside.
Revenue was represented by N. Venkatraman, Mukesh Kumar Maroria, V.C Bharathi, Prantap Singh, Kritagya Kait, H. R. Rao and Sarthak Karol.The respondent was represented by Pawanshree Agrawal, Priyanka Rathi, Ashwini Chandrasekharan, Shubhangi Gupta and Shubhangi Negi
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
