2021 Supreme(Bom) 233

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
UJJAL BHUYAN, MILIND N. JADHAV, JJ.
Qualcomm India Private Limited – Petitioner
Versus
Union of India and Others – Respondents
Writ Petition No. 1775 of 2020
Decided On : 21-05-2021

Point of Law: Section 11BB does not speak about or exempts any delay which is not intentional. The section does not distinguish delay which is intentional and delay which is unintentional. Once there is delay in payment of refund within three months from the date of receipt of application, rigour of section 11BB sets in and payment of interest on the delayed refund becomes obligatory.

Headnote:

Central Excise Act, 1944 - Section 11BB - Finance Act, 1994 - Section 83 - CENVAT Credit Rules, 2004 - Rule 3 - Export of Service Rules, 2006 - Service Tax Rules, 1994 - Rule 6A - Place of Provision of Services Rules, 2012 - Rule 3 - Service Tax - Petitioner is a company incorporated under Companies Act, 1956 having its registered office at Bandra Kurla Complex, Mumbai - Petitioner is engaged in business of providing support services primarily to its foreign affiliates within meaning of Chapter V of Finance Act, 1994 - In order to provide such services, petitioner receives various input services and avails credit for service tax paid thereon under rule 3 of CENVAT Credit Rules, 2004 -It is stated that services provided by petitioner qualified as export of service under erstwhile Export of Service Rules, 2006 as well as under rule 6A of Service Tax Rules, 1994 read with rule 3 of Place of Provision of Services Rules, 2012.

Finding of the Court:

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 CENVAT Credit Rules, petitioner as provider of output services that are exported is entitled to claim refund of credit of service tax paid on input services that remained unutilized - Respondent No. 3 vide letter informed petitioner that no other document evidencing that refund was sanctioned late had been submitted - Hence, he stated that claim for interest could not be processed on the basis of letter - However, in said letter respondent No. 3 completely ignored previous letter of petitioner and that letter was only a sequitur to the earlier letter - Petitioner again renewed prayer for grant of interest on delayed refund vide letter followed by reminder - However, petitioner has not received any communication from office of respondent No. 3 - It is evident that orders granting refund were passed after expiry of three months from date of receipt of refund applications - Taking up one such refund order pertaining to refund claim for period from June, 2008 to September, 2008, court find that Assistant Commissioner of Service Tax, Division III, Mumbai had sanctioned refund claim of Rs.52,42,806.00 under section 11B of Central Excise Act - Refund claim (application) was received in office but refund order was passed - Obviously, there is delay and refund was granted much after expiry of three months from date of receipt of application - In fact respondents have not disputed that refund orders were passed beyond period of three months from date of receipt of refund applications - Only defence put up is that there was no intentional delay by the respondents - Court have already analyzed section 11BB of Central Excise Act and interpretation given thereto by Supreme Court in Ranbaxy Laboratories Limited (supra) - Section 11BB does not speak about or exempts any delay which is not intentional - Section does not distinguish delay which is intentional and delay which is unintentional - Once there is delay in payment of refund within three months from date of receipt of application, rigour of section 11BB sets in and payment of interest on delayed refund becomes obligatory - It follows automatically; as a matter of law being a mandate of statute - Non-granting of interest in such a case would amount to failure to discharge statutory duty/obligation by refund sanctioning authority for which aggrieved claimant can seek a writ of mandamus from Writ Court under Article 226 of Constitution of India.

Result: Writ Petition Allowed.