2026-VIL-1505-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Eligibility to Interest on delayed refund of pre-deposit when the delay is attributable to assessee in submitting refund request - Appellant's delay in applying for refund - Appellant made pre-deposit of disputed service tax liability on 12.11.2014 and after losing appeal before Tribunal succeeded before High Court vide judgment dated 31.10.2018 - Appellant sent letter requesting refund of pre-deposit only on 1.4.2024 i.e. more than five years after High Court judgment - Department refunded pre-deposit with interest only from date of pre-deposit till date of High Court judgment and not for intervening period of over five years - Whether Appellant entitled to interest under Section 35FF for entire period from pre-deposit till refund despite Appellant's own delay in requesting refund - HELD - Section 35FF of Excise Act provides that interest shall be paid on amount deposited as pre-deposit from date of payment till date of refund. The language is mandatory and unconditional and provides for interest regardless of whether delay in refund was caused by department or assessee or for any other reason - Interest is time value of money and statutory provisions must be applied as they exist without regard to fairness equity or hardship caused. Although Appellant caused delay of over five years through neglect by not promptly submitting letter with copy of High Court judgment to department the statutory obligation to pay interest is independent of culpability or delay on either side - The central principle is that once pre-deposit is made Section 35FF requires interest from date of deposit till date of refund as matter of law. The delay attributable to assessee in submitting refund request cannot deprive it of statutory right to interest. Legal provisions must be applied regardless of inequity or gain to assessee – The appellant is entitled to interest for entire period from 12.11.2014 till date of refund including over five years of delay caused by Appellant's own inaction - The impugned order is modified to grant full interest for entire period – The appeal is allowed
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