The appellant has disputed the interest liability and the same has not been adjudicated, in that circumstances, the recovery of interest from the appellant is not in terms of law and the said recovery cannot be made
Section 79 of the CGST Act, 2017— Recovery of interest – The appellant appealed against the impugned orders wherein the amount of rebate claims had been adjusted against the payment of interest on delayed payment of tax. The counsel for the appellant submitted that the amount has been adjusted by invoking the provision of Section 11A of the Central Excise Act, 1944 readwith Section 79 of the Act, 2017. But no SCN was issued to them for invoking the provision of Section 11A. The counsel for the Revenue submitted that the appellant has not paid interest on the tax payable by them, therefore, two letters were issued to the appellant for payment thereof and the same was adjusted against the amount payable to the appellant in terms of Section 79 of the Act, 2017. The Tribunal observed that Section 11A of the CEA, 1944 is a machinery provision which provide for recovery of the interest and a SCN is required to be issued. Therefore, the provision of Section 11A of the CEA, 1944 are not applicable in this case. The Tribunal relied upon the judgment of the Hon’ble Bombay High Court in the case of M/s New India Civil Erectors Pvt. Ltd. and the Hon’ble Jharkhand High Court in the case of Mahadeo Construction Co. and observed that the appellant has disputed the interest liability and the same has not been adjudicated, therefore, the recovery of interest from the appellant is not in terms of law.
Held that:-The Hon’ble Tribunal set-aside the orders.