Criteria for interest on delayed payment of refund u/s 11BB of the Central Excise Act, 1944

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION

WRIT PETITION NO.1775 OF 2020
Qualcomm India Private Limited … Petitioner

Vs.

Union of India and others … Respondents
Mr. Prakash Shah a/w. Mr. Arun Jain and Mr. Jas Sanghvi i/b. PDS
Legal for Petitioner.
Mr. Sham Walve a/w. Mr. Ram Ochani for Respondents.

 CORAM : UJJAL BHUYAN &
MILIND N. JADHAV, JJ.
Reserved on : JANUARY 12, 2021
Pronounced on: MAY 21, 2021

Judgment and Order : (Per Ujjal Bhuyan, J.)

By filing this petition under Article 226 of the Constitution of India, petitioner seeks a direction to the respondents to forthwith grant and sanction interest on the refund amount after expiry of three months from the respective dates of application till the date of actual refund under section 11BB of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994.

2. We have heard Mr. Prakash Shah, learned counsel for the petitioner and Mr. Sham Walve along with Mr. Ram Ochani, learned counsel for the respondents.

3. Petitioner is a company incorporated under the Companies Act, 1956 having its registered office at Bandra Kurla Complex, Mumbai. Petitioner is engaged in the business of providing support services primarily to its foreign affiliates within the meaning of Chapter V of the Finance Act, 1994.

4. In order to provide such services, petitioner receives various input services and avails credit for service tax paid thereon under rule 3 of the CENVAT Credit Rules, 2004 (“CENVAT Credit Rules” hereinafter). It is stated that services provided by the petitioner qualified as export of service under the erstwhile Export of Service Rules, 2006 as well as under rule 6A of the Service Tax Rules, 1994 read with rule 3 of the Place of Provision of Services Rules, 2012.

5. Hence, petitioner did not pay any service tax on the output services so exported. This resulted into accumulation of CENVAT credit of service tax paid on input services. In terms of rule 5 of the CENVAT Credit Rules, petitioner as provider of output services that are exported is entitled to claim refund of the credit of the service tax paid on the input services that remained unutilized.

6. Accordingly for the period from June, 2008 to December, 2014, petitioner filed 19 refund applications claiming refund of untilized CENVAT credit under rule 5 of the CENVAT Credit Rules along with supporting documents. Details of the applications have been furnished in the form of a statement by the petitioner in paragraph 10 of the writ petition which for the sake of convenience is extracted hereunder:-

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