By TIOL News Service

MUMBAI, AUG 05, 2016: THE following is what transpired before the CESTAT in appeals filed by the assessee and the Revenue.

ST - Proceedings demanding ST on 'freight charges' [recipient of Goods Transport operators Service] for the period from 16st November 1997 to 1st June 1998, under the retrospective amendment of Finance Act, 2000 dropped by the adjudicating authority on 30.08.2004 - appellant filed refund claim on 08.09.2004 which was rejected - on appeal, the Commissioner (Appeals), set aside the order on the ground that as the adjudicating authority dropped the proceedings, therefore, refund cannot be denied - in the meantime, order dropping the proceedings was reviewed by CCE and demand confirmed of Rs.24.86 lakhs - appellant before CESTAT - revenue also in appeal against the order passed by Commissioner (Appeals): HELD - Tribunal in the case of Pandurang SSK Ltd., after taking into consideration the decisions of the Supreme Court in the cases of Laghu Udyog Bharati - 2002-TIOL-162-SC-ST and L.H. Sugar Factories Ltd - 2005-TIOL-105-SC-ST held that Section 71A, the provision under which recipients of Goods Transport Operators service were to file returns for purposes of assessment under Section 71, was not part of Section 73 of the Act prior to 10.9.2004, and set aside the demands which were issued prior to amendment of Section 73 of the Finance Act - in the present case, the SCN was issued before the amendment of Section 73 of the Finance Act - the ratio of the decision in the case of Pandurang SSK Ltd. is fully applicable to the facts of the present case - impugned order passed by the CCE is not sustainable and set aside and appeal allowed - refund claim filed by the appellant is to be decided afresh: CESTAT [para 8, 9, 12, 13]

We reported this decision of the Tribunal dated 04.04.2013 as - 2013-TIOL-2309-CESTAT-MUM.

The refund claim filed on 18th October 2013 was allowed but the sanctioned amount was transferred to the Consumer Welfare Fund on the ground of 'unjust enrichment', which order was set aside by the first appellate authority.

Accordingly, vide order dated 13th August 2014, refund was allowed to appellant but claim for interest was not allowed.

This time around, the lower appellate authority confirmed the findings on ineligibility for interest by his order dated 6st August 2015.

Aggrieved by that denial, the appellant is before the CESTAT.

The Bench observed -

++ Section 11BB of Central Excise Act, 1944 is unambiguously clear that non-sanction of refund within three months of filing of claim will set the 'interest clock' ticking. Mere pendency of any appellate / revisionary proceedings cannot justify non-sanction of such refunds. The law does not acknowledge recoveries to any such excuse or loopholes. Section 11BB is intended to ensure accountability on the part of revenue officials. To place the legally provided for interest on the backburner for any reason whatsoever would be tantamount to defying legislative intent.

++ Even the bar of unjust enrichment resorted to at one stage was found to be specious. It would appear that the tax authorities were determined not to grant the refund to the appellant. Withholding of interest will, therefore, only serve to encourage irresponsibility and non-responsiveness on the part of tax authorities.

++ That the duty was wrongly collected was known as far back as 2004. Revenue has no justification to support holding back of the wrongly credited amount. Section 11BB must be enforced in this matter.

The appeal was allowed and the original authority was directed to release the interest due till date of payment of refund immediately.

(See 2016-TIOL-1974-CESTAT-MUM)