Order Date – 31 January 2023

Parties: Commissioner of Service Tax, Calcutta Vs Sourav Ganguly 

Facts –

• The Respondent, Sourav Ganguly, was issued with a show cause notice dated 26th September, 2011 demanding service tax in terms of Section 73(1) of the Finance Act, 1994 and interest under Section 75 of the Central Excise Act, 1944 and proposing to levy penalty under Sections 76, 77 and 78 of the said Act.
• The learned Tribunal, directed that the respondent is entitled to a refund of the sum of Rs.1,51,66,500/- and a sum of Rs.50,00,000/- which he had deposited pursuant to the Court’s order but also along with interest at the rate of 10% from the date of deposit till the date of payment.

Issue –

• Whether the learned Tribunal was justified in granting interest?

Order –

• The divisional bench of Hon’ble High Court held that to claim interest not only emanates from the statutory provision of Section 11B of the Central Excise Act but also pursuant to the orders passed by this Court in the writ petition filed by the respondent before this Court. This order passed by the learned writ Court binds the intra parties namely, the department as well as the respondent and, therefore, it will be too late for the day for the appellant/department to contend that no interest is payable.
• The factual matrix has been thoroughly examined by the Tribunal and interest has been directed to be paid only from the date on which the amount was recovered till it was deposited with the Registrar General of this Court and, therefore, there can be no error in directing such payment of interest.
• The present appeal will be hit by the monetary limit fixed by the CBIC in its Circular dated 22nd August, 2019 which fixed the monetary limit of Rs.1 crore for the revenue to pursue appeals before this Court against the order passed by the Tribunal.
• Hence the appeal is dismissed.