Dexterous Designer And Assoicates vs C.C. & C.E. & S.T., Noida

(Arising out of OIA NO. NOI-EXCUS-000-APPL-92-14 dated 30.04.2014 passed by the Commissioner (Appeals) Customs, Central Excise and Service Tax, NOIDA)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

Dexterous Designer And Assoicates Appellant

Vs.

C.C. & C.E. & S.T., Noida Respondent

Appearance:

Present for the Appellant: Shri B.K. Singh, Advocate

Present for the Respondent: Shri Govind Dixit, DR

Coram: Honble Mr. Justice G. Raghuram, President

Honble Mr.R.K.Singh, Member (Technical)

FINAL ORDER NO.50601/2015

PER: R.K.SINGH

Appeal has been filed against Order-in-Appeal No. NOI/EXCUS/000/APPL/92/14 dated 30/04/2014. During the investigation of a case of Service Tax evasion the appellants had deposited Rs.8,02,878/- on 7.10.2008 and Rs.572747/- on 13.10.2008. On 28.02.2011 the original adjudicated authority vide Order-in-Original dated 28.02.2011 confirmed a demand of Rs.12,33,807/- alongwith interest and penalties. The appellants deposited Rs.308452/- towards penalties on 7.4.2011. The appellants filed appeal against the said Order-in-Original dated 28.2.2011 and commissioner (Appeals) vide order dated 29.7.2011 passed the following order

1. Service provided to the Sardar Patel Institute of Management Society (SPIMS) is not covered under Commercial or Industrial construction services.

2. Appellant is entitled for SSI exemption under notification No. 6/2005-ST dated 01.03.2005, as amended.

3. Amount received by the appellant was considered as inclusive of service tax.

4. Penalty imposed upon M/s Dexterous Designers & Associates, under section 78 of the Finance Act, 1994 is set aside.

The jurisdictional Assistant Commissioner is directed to compute/recalculate the tax liability in terms of this order for the year 2008-09.

2. Pursuant to the said Order-in-Appeal the appellants filed an application before the jurisdictional Commissioner to refund an amount of Rs.124909/- on 16.11.2011 which was followed up by several reminders. The Assistant Commissioner vide de-novo adjudication allowed refund of Rs.929780/- and issued a Cheque dated 11.12.2013. However the interest was not paid. Being aggrieved by the above Order-in-Original they filed appeal before the Commissioner (Appeals) for refund of interest on account of delay of 21 months in refunding the amount. The Commissioner (Appeals) vide Order-in-Appeal dated 30.4.2014 upheld the Order-in-Original observing that

(i) the appellants failed to prove that they had made application for refund within time and mere writing of letters can not be taken as formal filing of the refund application and

(ii) they had not been able to clarify whether they had made a pre-deposit under Section 35F of the Central Excise 1944 or had deposited service tax and

(iii) the department had not delayed the matter; and therefore the interest was not payable.

3. During the hearing, the appellants contended that the refund of penalty amount is not in dispute and that they are seeking interest on the amount of S.T. which had been refunded to them.

4. The Ld. A.R. reiterated the contents of the impugned order.

5. I have considered the contentions of the appellants. The brief issue to be decided in this case is whether the appellants are entitled to interest on the amount of refund sanctioned by the original adjudicating authority vide order dated 11.12.2013. In this regard it is to be noted that the Commissioner (Appeals) passed an order dated 29.7.2011 directing that the amount of tax liabilities should be recomputed /re-calculated. As a result of such recomputation/recalculation, what ever service tax was found to have been paid in excess was liable to be refunded. In the present case the appellants filed application dated 16.11.2011 seeking refund of the excess service tax paid and this application has been referred to in the Order-in-Original dated 11.12.2013 as the refund claim. Be that as it may, this issue came for decision in the case of Varsha Polymer Products Pvt. Ltd. vs. Commissioner of Customs, Kandla 2014 (301) E.L.T. 128 (Tri-Ahmd.) wherein it was held that:-

5.3 In this order passed CESTAT, Chennai, in the case of Sowbaghya Lakshmi Silicate Vs. CCE, Trichy (supra) reliance was also placed on the orders passed by Supreme Court in the case of Commissioner Vs. I.T.C. Ltd. [2005 (179) E.L.T. 15 (S.C.)], Allahabad High Court in the case of K.S. Steel Works Vs. UOI [1996 (83) E.L.T. 29 (ALL.), A.P. High Court in the case of Afcons Infrastructure Ltd. Vs. UOI [2006 (193) E.L.T. 278 (A.P.) = 2007 (7) S.T.R. 615 (A.P.)] etc. The ratio of the law laid down by the Supreme Court and the High Courts is that in case of remand also when refund of any pre-deposited amount accrues, then interest liability will also start from three months after the date of remand order which is also the clarification as per C.B.E. & C. Circular No. 802/35/2004 CX., dated 8.12.2004. In view of the above settled law interest to the appellant was due after three months from remand order dated 30.4.2002 and not after three months from 29.1.1998, the date of pre-deposit made by the appellant..

6. In the light of the aforesaid decision of CESTAT which is directly applicable to the present case, I set-aside the impugned order and remand the case to the original adjudicated authority to pay the interest to the appellants in terms of the ratio laid down in the CESTAT Order in the case of Varsha Polymer Products cited above.

(Pronounced in the court on 13.3.2015)

(R.K. Singh)

Member (Technical)

K. Gupta

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