Order date – 12 December 2022

Facts –

• The Appellant, Capita India Pvt. Ltd. is engaged in the provision of business support service to its customer located outside India which qualifies as “export” under the Service Tax Rules, 1994.
• The appellant exported the service without payment of any Service Tax. In terms of Rule 5 ibid read with notification 27/2012-CE(NT) dated 18.06.2012 the appellant claimed refund of Cenvat Credit accumulated on account of the export of services for the period April, 2013 to September, 2015.
• On a letter/application being filed by the appellant with the Adjudicating Authority, requesting for the refund that was allowed by the Tribunal, the amount was sanctioned by the said authority. However, the said authority failed to pay any interest on the delayed sanction of refund under section 11BB of Central Excise Act, 1944 despite the refunds being sanctioned beyond the period of three months from the date of filing of refund application.

Issue –

• Whether the appellant is eligible for interest on the delayed sanction of refund claim filed by them under Rule 5 of Cenvat Credit Rules, 2004?

Order –

• The Tribunal relied on the decision of the Hon'ble High Court of Gujarat at Ahmedabad in the matter of Commissioner of Central Excise vs. Reliance Industries Ltd. 2010 (259) ELT 356 (Guj) wherein it was held that when there is delay in sanctioning the refund under Rule 5 and Notification dated 18.06.2012, the provisions of Section 11BB would be clearly attracted.
• As per the Principle of Judicial Discipline and in particular Article 141 of the Constitution of India, which provides that the decisions of the Hon'ble Supreme Court are binding on all the Courts in India and “all Courts” includes quasi-judicial authorities also, therefore the Learned Commissioner ought to have followed the law laid by the Hon'ble Supreme Court in Ranbaxy Laboratories Ltd..
• Therefore, following the decisions as aforesaid, the appeal filed by the appellant is allowed with consequential relief.