Whether limitation applicable for refund of interest paid erroneously?

PJ/Case Law /2016-17/3226

Case:- SCHENCK ROTEC INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA

Citation-:2016 (42) S.T.R. 1066 (Tri. - Del.)

Brief Facts:- The brief facts of the case are that the appellant is registered with the Service Tax Department for providing taxable service, namely, Business Auxiliary Service (BAS). The appellant connects the Indian clients/buyers to foreign suppliers for direct supply of goods to them and for providing the said service, the appellant receives commission in foreign currency. Pursuant to the letter dated 15-7-2008 from the jurisdictional range Superintendent, the appellant had deposited the service tax of Rs. 54,67,571/- and interest of Rs. 10,24,535/- on export of such service provided by the appellant during the disputed period. Pursuant to C.B.E. & C. Circular No. 111/05/2009-S.T., dated 24-2-2009, the appellant filed the application before the jurisdictional service tax authorities claiming refund of the above service tax amount. The refund application was considered favorably by the Department and vide order dated 22-12-2010, the service tax amount of Rs. 54,67,571/- was refunded to the appellant. However, the refund claim filed by the appellant for the interest amount of Rs. 10,24,535/- was rejected by the Department vide order dated 2-6-2011 on the ground of limitation, since the refund claim application was not filed within one year from the relevant date. In appeal, ld. Commissioner (Appeals) has rejected the appeal of the appellant by upholding the adjudication order. The rejection of refund claim for the interest amount is the subject matter of the present disputein appeal.
Appellant’s Contention:- Shri K.K. Sharma, ld. counsel for the appellant submitted that though the application was filed claiming refund of interest amount on 15-9-2010, but the said application was in continuation to the earlier application filed on 30-7-2009, wherein claim was lodged for refund of the service tax amount. Thus, according to the ld. advocate, the refund claim for the interest amount has been filed within the stipulated time prescribed in Section 11B of the Central Excise Act, 1994. Ld. advocate further submitted that since the amount in question was deposited under the direction of the Department, the same should be refunded without insisting for a formal refund application and for refund of such amount, the time limit prescribed in central excise statute shall not be applicable.

Respondent’s Contention:-On the other hand, Shri R.K. Mishra, ld. departmental representative appearing for the Revenue submitted that the interest amount was paid by the appellant on different dates between the period 18-12-2008 and 29-4-2009 and refund claim was filed on 15-9-2010, which is beyond one year time limit prescribed for claiming the refund. He further submitted that the refund claim of interest amount has not been paid under protest by the appellant. Thus, according to the ld. departmental representative, the refund claim is clearly barred by time-limit.
Reasoning of Judgement:- The logical behind the judgement is that theadjudicating authority vide order dated 2-6-2011 has rejected the refund claim of Rs. 10,24,535/- on the sole ground that the same was filed on 15-9-2010, claiming the refund of interest paid during the period 18-12-2008 to 29-4-2009, which is beyond the period of one year prescribed in the statute. On perusal of documents available on file, it also transpires that under the cover of letter dated 30-7-2009, the appellant had enclosed the refund application for sanction of refund of service tax amount of Rs. 54,67,571/-. Neither in the said letter, nor in the refund application, the appellant did mention for refund of the interest amount of Rs. 10,24,535/- paid on the service tax amount. Section 11B of Central Excise Act, 1944 provides that “a person claiming refund of any duty of excise and interest paid on such duty shall make an application for refund of such duty and interest before the expiry of one year from the relevant date”. Since the statute provides that the refund claim can be filed for duty of excise “and” the interest paid on such duty, the claimant has to file the refund application claiming refund of both duty as well as interest amount. In the present case, since the appellant for the first time had filed the application, claiming refund of interest of Rs. 10,24,535/- vide its letter dated 15-9-2010, paid during the period 18-12-2008 to 29-4-2009,the same is barred by limitation of time, being filed beyond the period of one year from the relevant date. Further, there is no document available on record to prove that the interest amount was paid by the appellant under protest.

In view of the above findings, the appeal filed by the appellant is dismissed.
Decision:- Appeal dismissed.
Comment:-The substance of the case is that even for filing refund of interest, the time limit prescribed in section 11B of the Central Excise Act, 1944 applies. Hence, the refund claim for interest is also required to be filed within a period of one year from the relevant date.
Prepared by- Akshit Bhandari

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PJ/Case Law /2016-17/3226

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