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2022 (9) TMI 270 - Service Tax
Interpretation of statute - Interest on refund - whether the interest on any amount pre-deposited prior to 6.8.2014 continues to be covered by provisions of un-amended Section 35FF of Central Excise Act, 1944 or will it be governed by amended Section 35FF ibid entitling interest from the date of pre-deposit?
HELD THAT:- A perusal of the provisions of Section 35FF would make it clear that earlier i.e. upto 6.8.2014, the interest was liable to be paid only in the case of delay beyond three months in granting the refund from the date of communication of order passed by the Commissioner (Appeals) or the Tribunal, whereas post 6.8.2014, this has been changed and an interest has been made payable at a rate not below 5% and not exceeding 36% p.a. as is for the time being fixed by the Central Government by notification in the official gazette on such amount from the date of payment of amount till the date of refund of such amount. Proviso has also been added to it that any amount deposited under this section prior to the amendment, shall continue to be covered by the provisions of S.35FF as it stood before the amendment.
Admittedly, in the instant matter the amount was pre-deposited by the appellant on 25.6.2014 under Section 35F as per the direction of the Hon’ble High Court and during that period un-amended section 35FF[which dealt with interest on delayed refund of amount deposited u/s.35F] mandates the payment of interest only if there was a delay of refund beyond three months from the date of the order of the Tribunal. Interest from the date of payment of the amount till the date of refund of such amount has been made applicable only for post-6.8.2014 deposits when section 35FF was amended.
Admittedly in the instant matter the pre-deposit was made on 25.6.2014, which is prior to 6.8.2014 when section 35FF required an interest as specified in Section 11BB to be paid for any amount of pre-deposit which has been refunded after a period of three months from the date of communication of order of appellate authority till the date of refund of such amount - in the instant matter the interest on refund has to be dealt with in accordance with the erstwhile section 35FF which clearly mandates the payment of interest only if there was a delay beyond three months. The statutory period prescribed therein is 3 months from the date of communication of the order of the Appellate Authority.
The statute uses the word ‘communication of the order of appellate authority’ and that cannot be construed as ‘receipt of the copy of the order’. When any order is pronounced in Tribunal, Department is represented through Departmental Representative/Authorised Representative and therefore communication of order to them deemed to have been communicated to the concerned authority which has to sanction refund.
After the expiry of three months from the date of the final order dated 19.02.2020, the appellant is entitled for the interest on delayed refund till the date of refund of the pre-deposit amount and to that extent only the impugned order is modified and the matter is remanded to the Adjudicating Authority for calculating the amount of interest on the above terms and to pay the same to the appellant within a period of two months from the date of this order - Appeal allowed in part.