Haldor Topsoe INDIA Private Limited vs. The Assistant Commissioner Of Goods And Service Tax (East)

Held

The Court held that the appellant is entitled to interest on the delayed refunds. The reasoning was based on the statutory regime of Section 11 BB of the Central Excise Act, 1944, which is made applicable to service tax matters by Section 83 of the Finance Act, 1994. The Court referred to Supreme Court pronouncements in Union of India And Others Vs. Hamdard (Waqf) Laboratories and Ranbaxy Laboratories Limited Vs. Union of India and Others, which clarify that the Revenue's liability to pay interest commences from the expiry of three months from the date of receipt of the refund application. The ratio decidendi is that statutory provisions for interest on delayed refunds are mandatory and apply when refunds are not processed within the stipulated period. The Court answered the framed question of law in the affirmative, in favour of the assessee. The Assessing Authority/empowered GST Officer was directed to calculate the interest amount under Section 11 BB of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, and remit it to the appellant's account within three months.

Facts

The petitioner, Haldor Topsoe India Private Limited, filed refund applications for service tax paid on taxable input services across several quarters between July 2012 and June 2014, totaling ₹2,93,15,554. The Assistant Commissioner sanctioned a refund of ₹2,84,48,051. The petitioner's appeal to the Commissioner (Appeals) for the remaining amount was dismissed. The Tribunal, in its impugned order dated 14.09.2017, allowed a further refund of ₹7,32,025. The petitioner's grievance before the Tribunal was that the Assistant Commissioner had not granted interest on the allowed refunds, a claim the petitioner alleged was not dealt with by the Tribunal. This appeal is against the Tribunal's order.

Key Issues

1. Is the appellant entitled to interest under Section 11 BB of the Central Excise Act, as claimed? The petitioner argued that the Tribunal failed to address its claim for interest on the service tax refunds, which were allowed. The petitioner contended that, in light of Section 11 BB of the Central Excise Act, 1944, made applicable to service tax via Section 83 of the Finance Act, 1994, they are entitled to interest on delayed refunds. The petitioner relied on Supreme Court judgments in Union of India And Others Vs. Hamdard (Waqf) Laboratories (2016) 6 SCC 621 and Ranbaxy Laboratories Limited Vs. Union of India and Others (2011) 10 SCC 292, which establish the Revenue's liability to pay interest from the expiry of three months from the refund application date. The respondent (Revenue) did not record any specific arguments against the claim for interest.