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2023 (10) TMI 888 - AT - Service TaxRelevant time for calculation of interest on delayed refund - interest is payable after three months from the date of filing of refund application in terms of Section 11BB of the Central Excise Act, 1944 or from the date of order of this Hon’ble Tribunal allowing the refund claim? HELD THAT:- As per the section 11BB the assessee is entitle for the interest on the refund after three months from the date of filing of application for refund. In the present case there is no dispute that after making suo-moto payment of Service Tax, the appellant first time filed the refund application on the various dates as given in the respective refund claims filed first time. It is these dates on which the refund applications were filed. Accordingly, as per the Section 11BB the appellant are entitled for the interest after three months from such dates of filing the refund applications. The contention of the Revenue which is based on sub clause (ec) of clause (B) of Sub Section (5) of the Section 11B of the Central Excise Act, 1944 shall apply only in a case where there is a demand case where initially the demand is confirmed by the lower Authority, and when the same is set aside by the Tribunal /High Court /Supreme Court then only refund arises. In such case only, after setting aside the demand the refund arises out of such order by which demand was set aside and in that case only the interest is payable from the three months after the date of order of Tribunal/High Court/Supreme Court as the case may be. However, the contention of the revenue does not apply in a case where there is no demand but the case is of refund of suo-moto payment of service tax - Accordingly, the appellant is legally entitled for the interest after three months from the date of application for refund made first time. This issue has been considered in various judgments particularly in the Apex Court judgment of Ranbaxy Laboratories Ltd. [2011 (10) TMI 16 - SUPREME COURT], wherein it was held that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made - The fact of the present case is identical to the facts in the aforesaid Hon’ble Supreme Court judgment, in the above judgment also it was the department’s contention that the interest is payable from the date of refund order. Hence the ratio of the aforecited Apex Court judgment is directly applicable. In the present case also the department is considering the date after the Tribunal has passed the order - there is absolute no doubt that the appellant is entitled for the interest after three months from the date of refund applications as mentioned in respective refund applications filed first time after suo-moto payment of Service Tax and interest thereon. In the facts of the present case this Tribunal can order for grant of interest only in terms of section 11BB and not beyond that. Needless to say that the Appellant have liberty to approach the Hon’ble High court for the interest from the date of deposit till the date which is after three months from the date of filing of application. Appeal allowed.
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