The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi has held that the assessee was entitled to claim interest from the date of sanctioning of the rebate claim of export.
BACKGROUND
The two show cause notices were issued to the appellant proposing recovery of duty, the demand was confirmed alongwith interest and penalty was also imposed.
The appellant challenge the said order before the Tribunal and the Tribunal allowed their appeals. In pursuant to the order of this Tribunal, the appellant took the Cenvat credit in their Cenvat credit account.
In January 2004, against the order of the Tribunal, the department filed an appeal before the Apex Court and the Apex Court partly allowed the appeal filed by the revenue.
Consequent to that, the appellant reversed the Cenvat credit taken on the basis of this Tribunal order. The revenue asked the appellant to pay interest for the reversal of Cenvat credit for the intervening period, although during the entire period, Cenvat credit taken by the appellant remain unutilized in their Cenvat credit account, so, the appellant denied for reversal of Cenvat credit.
The Assistant Commissioner deducted the amount of interest from the appellant’s sanctioned rebate claim on exports. As the said amount of interest was recovered in February & March, 2016 which the appellant protested, thereafter, the appellant contested the said deduction of interest from the rebate claims.
The appellant submits that as on 04.02.2016 and 12.03.2016, the Adjudicating Authority deducted interest despite protest made by the appellant from the rebate claims on export and later on, as per the order of Tribunal, the refund claim were sanctioned. Therefore, for the intervening period, the appellant is entitled for 12% interest in terms of the order passed by this Tribunal.
ISSUE RASED
Whether the rebate claim which was retained by the Adjudicating Authority illegally, in that circumstances, whether the appellant is entitled for interest for the intervening period or not?
OBSERVATION
The tribunal held that the appellant is entitled to interest at the rate of 12% P.A. as held by this Tribunal.
The CESTAT held that refund is to be treated as refund of pre-deposit made when the appeal was pending. There is no dispute that the amounts deposited is duty but this is not the issue which has been taken into account while precedent decisions have allowed the interest at 12% on the refunds claimed in respect of pre deposit.
Case Title: M/s Shree Rajasthan Syntex Limited V/s Commissioner, Central Goods and – Service Tax (Commissionerate) Rajasthan
Citation: Excise Appeal No. 51267 of 2023