The appellant constructed a mall. It availed credit of tax paid on input services. The Commissioner disallowed such input credit on the ground that it is not “input service” as defined under Rule 2 of CENVAT Credit Rules. The appellant deposited the amount “under protest”. The Appeal filed against this order is allowed by the Hon’ble CESTAT and matter is remanded for quantification. On remand, the Ld. Commissioner allows credit. The appellant filed refund claim for such amount deposited. The same was allowed. However, no interest was granted. The department contended that refund of duty under section 11B was sanctioned within three months of date of application after passing of order by the commissioner. Hence, no interest under section 11BB of the Act. Therefore, appeal was filed.
The CESTAT, New Delhi allows appeal and sanctions interest @12% from the date of deposit till date of actual refund. It is held: (i) provisions of section 11B/11BB would not be applicable to the said deposit as it is not refund of duty; (ii) if the amount is collected without authority of law, the same has to be refunded with interest; (iii) refund is not time barred and not hit by unjust enrichment and was a deposit during investigation; (iv) distinguishes Mafatlal Industries (SC) on facts and follows decision in Fujikawa Power.
Indore Treasure Market City Pvt. Ltd. v. Commissioner of CGST & C. Ex., Indore [ST/55434 of 2023-Delhi CESTAT]
