Sunrise Immigration Consultants Private Limited Vs CG & ST- Chandigarh (CESTAT Chandigarh)
CESTAT Chandigarh held that interest on delayed refund at the rate of 12% per annum payable from the date of deposit till the date of payment.
Facts- The appellant is engaged in providing Visa Consultancy Services to its various clients who wishes to study or settle down in the foreign country. The matter involved here is that appellant paid an amount of Rs. 25,39,804/- under protest as dispute was going on between the appellant and the department. The matter was decided in favour of the appellant by the Tribunal. Accordingly, refund claim was filed by the appellant. Post travelling the refund claim, Tribunal approved the same.
However, appellant filed a letter with the department requesting to grant the interest for delayed refund. CIT(A) denied the interest claim by rejecting the appeal with a finding that the refund claim was duly sanctioned within 3 months from the date of filing the refund application.
Conclusion- Held that any amount that is deposited during pendency of the adjudication proceedings or investigation is in the nature of deposit made under protest. I am of the considered view that the appellant is entitled to claim interest on delayed refund from the date of deposit till the date of payment at the rate of 12% per annum.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 25.07.2022 passed by the Ld. Commissioner (Appeals) wherein the Ld. Commissioner (Appeals) has rejected the appeal of the appellant for claim of interest on delayed refund.
2. Briefly stated the facts of the case are that the appellant is engaged in providing Visa Consultancy Services to its various clients who wishes to study or settle down in the foreign country. The appellant was duly registered with the department for providing taxable services under the category of „Commercial Training and Coaching‟ and other taxable services. During the relevant period, a dispute was going on between the appellant and the department with respect to taxability of referral services rendered by the appellant and the department was of the view that the services provided by the appellant to Canadian banks and foreign universities/colleges does not amount to export of services as the provision of the services is the location of the service provider i.e., India. The appellant were issued three show cause notices, show cause notice –I dated 20.10.2014 (April 2009 to March 2014), show cause notice-II dated 20.04.2019 (April 2015 to March 2016), show cause notice-III dated 22.04.2019 (April 2016 to June 2017) and when these show cause notices were pending for adjudication, the appellant in order to safeguard themselves from the charge of interest and penalty as well as to buy mental peace, deposited the amount under protest totalling to Rs. 25,39,804/-. The amount was paid in four tranches starting from July 2014 (before issuance of the first show cause notice) when the investigations were going on against the appellant and last payment in April 2015. The said amount was paid under protest as the dispute was going on between the appellant and the department. Thereafter, with regard to show cause notice –I dated 20.10.2014, the demand proposed was confirmed against the appellant by the adjudication as well as by the appellate order. The appellant against the said appellate order preferred an appeal before this Tribunal and this Tribunal after considering the submissions made, decided the issue regarding provision of referral services in favour of the appellant and dropped the demand confirmed against the appellant vide its order appellant filed a refund claim on 10.05.2018 seeking refund of Rs. 25,39,804/-(deposited under protest for the year 2014-2015). Thereafter, a show cause notice dt. 24.01.2019 was issued to the appellant proposing to reject the refund claim and vide order-in-original dt. 24.12.2019 rejected the refund claim. The findings of the adjudicating authority was confirmed and upheld by the Ld. Commissioner (Appeals) vide its order dated 11.01.2021. Thereafter, the appellant preferred an appeal before this Tribunal and this Tribunal vide its order dated 14.06.2021 allowed the appeal by setting aside the order-in-appeal and it was held that the refund claim filed by the appellant was within limitation. Thereafter, the appellant wrote letters to the department for granting of refund claim which was finally sanctioned vide order dated 13.04.2022 under Section 11B & Section 11BB, however, no interest was granted to the appellant. Thereafter, the appellant filed a letter with department requesting to grant the interest for the delayed refund but in reply to the said letter, the appellant was simply asked to avail the appellate remedy without providing any reasoning for not granting the interest. Thereafter, the appellant preferred an appeal against the said order dated 13.04.2022 but the Ld. Commissioner (Appeals) denied the interest by rejecting the appeal of the appellant vide its order dated 25.07.2022 with a finding that the refund claim was duly sanctioned within three months from the date of filing the refund application.
3. Heard both the parties and perused the records.
4. Ld.Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts of the case and law and the binding judicial precedents on the same issue. He further submitted that the amount paid by the appellant was under protest and to avoid the implication of huge liability of interest and penalty, when the investigation and dispute was going on for the prior period and the subsequent period. He further submitted that this Tribunal itself recorded the facts while passing order dated 14.06.2021 that the dispute was going on between the appellant and the revenue when the service tax was paid for the period 2014-2015. He further submitted that the impugned refund claim was sanctioned by accepting the facts that it was paid under protest and it was held that the impugned refund claim is not time barred. He also submitted that the Ld. Commissioner (Appeals) has erroneously concluded that the date of filing of refund application would be considered from the filing of the bank details by the appellant whereas the fact of the matter is that the bank details were already there with the department because the department sanctioned the refund claim for the prior period to the appellant. He further submitted that since the appellant has paid the amount when the investigation and proceedings were going on and moreover no show cause notice for the period in dispute i.e. 20142015 was issued to the appellant. He also submitted that the amount deposited remained an amount or deposit, as the same was neither appropriated nor any demand was raised against it and therefore, Section 11B and 11BB would not be applicable in the present case and the interest has to be granted from the date of deposit. For this submission, he relied upon the following decisions:-
