2004 (1) TMI 481 - AT - Customs

Summary

Issues:
1. Entitlement to interest under Section 27A of the Customs Act, 1962 for delay in refund claim sanctioning.
2. Calculation of interest period exceeding 3 months from the date of assent of the president to the Finance Bill, 1995.
3. Interpretation of Section 27A in relation to the refund amount becoming payable after the final order by the Commissioner (Appeals).
4. Determining the critical dates for interest liability calculation based on the date of application and date of sanction.

Analysis:
1. The appeal involved the entitlement to interest under Section 27A of the Customs Act, 1962 for the delay in sanctioning a refund claim. The Commissioner of Customs (Appeals) had held that the importers were entitled to claim interest for the delay exceeding 3 months from the date of assent of the president to the Finance Bill, 1995.

2. The respondents claimed that the initial refund application was made within 6 months from the payment of duty, which was paid on 23rd August 1992. The refund claim was rejected initially but was later granted after obtaining favorable assessment orders. The refund amount was sanctioned on 28th February 1997, after the provisions of Section 27A had come into force.

3. The interpretation of Section 27A was crucial in determining the interest calculation. The appellant argued that interest became payable only after 3 months from the date of the final order by the Commissioner (Appeals) in April 1999, as per the explanation under Section 27A. However, the Tribunal noted that the interest liability starts for the delay exceeding 3 months from the date of assent to the Finance Bill, 1995.

4. The Tribunal analyzed the critical dates of application and sanction to determine the interest liability period. Despite intervening disputes and delays in reassessment orders, the fact that the refund was eventually sanctioned was undisputed. Therefore, the Tribunal upheld the Commissioner's order, finding no infirmity in the decision.

Conclusion:
The Tribunal rejected the Revenue's appeal, affirming the entitlement to interest under Section 27A for the delay in sanctioning the refund claim, calculated from the date exceeding 3 months from the assent of the president to the Finance Bill, 1995. The critical dates of application and sanction were pivotal in determining the interest liability period, leading to the dismissal of the Revenue's appeal.