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TMI Blog2025 (5) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... der Notification No. 25/2012-ST dated 20.06.2012. In view of the Final Order of the Tribunal, the appellants filed refund claim along with interest @ 12%. The refund were sanctioned by both the authorities, along with interest @ 6% by invoking Section 11BB of the Central Excise Act, 1944. Against the said order sanctioning interest @ 6%, the appellants are before me. 3. The contention of the learned Consultant for the appellant is that appellant deposited the amount on non-taxable and exempted services by mistake of law, but by any stretch of imagination, it cannot be said that such amount is an amount to service tax to attract Section 11B of the service tax to support this he relied on the decision of Hon'ble Karnataka High Court in the case of Commissioner of Central Excise versus KVR Construction reported as 2012 (26) S.T.R. 195 (Kar.). In that case also the assessee has deposited tax by mistake on exempted services. The refund was rejected on limitation by lower authorities as per Section 11B. As per the said decision, Section 11B was not applicable as whatever was deposited by the assessee was not duty or tax. This decision has been upheld by Hon'ble Apex Court reported as 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted as 2012 (27) S.T.R. 420 (All.) (e) Ebiz. Com Pvt. Ltd. versus CCE reported as 2017 (49) S.T.R. 389 (All.) (f) Riba Textiles Ltd. versus CCE ST reported as 2020 - TIOL - 932 - CESTAT - CHD. 4. On the other hand, learned authorized representative opposed the contention of the learned consultant and submitted that the appellants are already granted interest @ 6% under the Notification No. 67/2003 - CE (NT) dated 12.09.2003. He also relied on the decision in the case of Triumph International (India) Pvt. Ltd. versus Commissioner of GST & CE, Chennai reported as 2024 (7) TMI 300 - CESTAT Chennai, wherein this Tribunal held that the appellant would be eligible for interest and effective rate issued under Section 11BB of the Central Excise Act @ 6%. He also submitted that in the case of Triumph International (supra) relies upon the decision of the Hon'ble Apex Court in the case of Mafatlal Industries Ltd. versus Union of India reported as 1996 (12) TMI 50 (S.C.) and also in the case of M/s Nino Chaks (P) Ltd. versus Commissioner of Customs (General) reported as 2019 (9) TMI 1166 - Delhi High Court, wherein the delay was not inordinate. He also relied on the decision of Hon'ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, appellant paid the service tax by mistake and which was not payable by the appellant. Therefore, the decision in the case of Triumph International (India) Pvt. Ltd. (supra) is not applicable to the facts of this case. Further, in the case of Dinesh Tobacco Industries Ltd. (supra), it is the case that the assessee claim refund of the central excise duty paid under compounded levy scheme on the goods which were exported and they were entitled for rebate of duty paid on goods exported which is not the case in hand. Further, Revenue is relied on the decision of the Hon'ble High Court of Delhi in the case of S.S. Automotive Ltd. (supra), in the said case the respondent themselves has conceded the claim of said interest. Further, in the case of D.D. International Pvt. Ltd. (supra), a refund claim was sanctioned under Section 129EE of the Customs Act. In that circumstances, the Hon'ble High Court held that the interest is payable @ 6%, I find that whether the provision of Section 11B of the Act are examined by the Hon'ble Karnataka High Court. In the case of KVR Constructions Ltd. (supra) wherein the Hon'ble High Court recorded as under :- "15. We are not concerned with the other con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some other assessee either by the High Court or the Supreme Court, and as soon as the assessee came to know of the judgment (within the period of limitation), he initiated action for refund of the tax paid by him, due to mistake of law. After referring several judgments and provisions of Section 11A & 11B of Central Excise Act, at paragraph 137 of the said judgment, their Lordships have concluded as under : "137. Applying the law laid down in the decisions aforesaid, it is not possible to conclude that any and every claim for refund of illegal/unauthorized levy of tax can be made only in accordance with the provisions of the Act (Rule 11, Section 11B etc. as the case may be), and an action by way of suit or writ petition under Article 226 will not be maintainable under any circumstances. An action by way of suit or a petition under Article 226 of the constitution is maintainable to assail the levy or order which is illegal, void or unauthorized or without jurisdiction and/or claim refund, in cases covered by propositions No. (1), (3), (4) and (5) in Dulalbhai's case, as explained hereinabove, as one passed outside the Act and ultra vires. Such action will be governed by the gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not been passed on by him to any other person." 18. From the reading of the above Section, it refers to claim for refund of duty of excise only, it does not refer to any other amounts collected without authority of law. In the case on hand, admittedly, the amount sought for as refund was the amount paid under mistaken notion which even according to the department was not liable to be paid. 19. According to the appellant, the very fact that said amounts are paid as service tax under Finance Act, 1994 and also filing of an application in Form-R of the Central Excise Act would indicate that the applicant was intending to claim refund of the duty with reference to Section 11B, therefore, now it is not open to him to go back and say that it was not refund of duty. No doubt in the present case, Form-R was used by the applicant to claim refund. It is the very case of the petitioner that they were exempted from payment of such service tax by virtue of circular dated 17-9-2004 and this is not denied by the Department and it is not even denying the nature of construction/services rendered by the petitioner was exempted from to payment of Service Tax. What one has to see is whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act". and the said decision has been upheld by the Hon'ble Apex Court. Further, the Hon'ble High Court of Tripura in the case of Tripura Cricket Association (supra) Hon'ble High Court observed as under :- "4. Learned counsel for the petitioner placed reliance on the judgment rendered by the Hon'ble Karnataka High Court in case of CCE (Appeals) v. KVR Construction [2012] 22 taxmann.com 408/36 STT 33/2012 (26) S.T.R. 195 (Kar.). In the said judgment, the Hon'ble Karnataka High Court came to the conclusion that section 11B of the Central Excise Act was not applicable to a refund application filed by the petitioner based on mistake of law. The Hon'ble Karnataka High Court fairly held that section 35B(1)(b) was inapplicable. Learned counsel for the petitioner further relied upon the challenge to the said order of the Hon'ble Karnataka High Court before the Hon'ble Supreme Court in case of Commissioner v. KVR Construction 2018 (14) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which is not payable at all and same shall be treated as Revenue deposit not service tax paid by the appellant. Therefore, the provision of Section 11B of the Act is not applicable. The same view has been affirmed by the Hon'ble Apex court in the case of KVR Constructions Ltd. (supra). As provision of Section 11B are not applicable to the facts of the present case, in that circumstances, determining the rate of interest under Section 11BB of the Act is not applicable. Therefore, the Notification No. 67/2003 - CE (NT) dated 12.09.2003 also not applicable to the facts of the case.
9. In that circumstances, relying on the decision of further in the case of Indus Towers Limited vide Final Order No. 60101 of 2025 dated 24.01.2025, wherein the interest @ 12% has been granted to the appellant. Therefore, following the judicial pronouncement, I hold that the appellant are entitled interest @ 12% on delayed refunds. Accordingly, the Revenue is directed to pay interest @ 12% per annum to the appellant. All appeals are allowed by modifying the imp8ugned orders granting refund along with interest @ 12%.
(Order pronounced in open court on 06/05/2025.) X X X X Extracts X X X X X X X X Extracts X X X X
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