SHROFF UNITED CHEMICALS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Rule, by consent returnable forthwith.With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal.

(2.) These proceedings under Article 226 of the Constitution are directed against an order dated 18 March 2011 passed by the Deputy Commissioner of Service Tax I, Division III, in so far as interest has been disallowed to the Petitioners on a claim for refund. The grievance of the Petitioners is that this is contrary to the express terms of Section 11 BB of the Central Excise Act 1944 and a finding of the Commissioner (Appeals) dated 15 October 2010.

(3.) The case of the Petitioners is that in anticipation of the import of intellectual property services, they had applied for and obtained service tax registration under Section 69 of the Finance Act 1994. The Petitioners had made an application to the Reserve Bank for the remittance of funds abroad, for a proposed acquisition of the registration of certain agro chemical products in the U.S. In anticipation of the permission of the Reserve Bank for the remission of funds abroad the Petitioners deposited a sum of Rs.1.02 Crores under a TR 6 challan dated 31 March 2006. This was in the belief that on obtaining registration, service tax was liable to be paid by the Petitioners. However, the Petitioners did not receive permission from the Reserve Bank to remit the amount until 31 March 2006 as a result of which they could not acquire the registration of the said agro chemical products in the U.S.