2003 (11) TMI 467 - AT - Customs

Summary

Issues:
1. Rejection of interest on delayed payment for refunded amount due to incomplete application.
2. Interpretation of provisions of Section 27A regarding payment of interest on refunded duty.
3. Compliance with Customs Refund Application (Form) Regulation, 1995 for refund claims.

Analysis:
1. The dispute arose when the authorities rejected the request for interest on a refunded amount due to an incomplete application filed by the appellants. The refund claim was initially filed on 3-1-2000 and later sanctioned on 1-11-2000, but the request for interest was denied. The Commissioner (Appeals) upheld the rejection, citing the absence of documentary evidence to show that the refund would not result in unjust enrichment.

2. Section 27A mandates the payment of interest on refunded duty if not refunded within three months from the date of receipt of the application. The authorities contended that the incomplete application caused the delay in processing the claim, thus interest was not granted. However, the Tribunal noted that the application was taken up for disposal within the three-month period, and the documentary evidence was submitted later, leading to the sanction of the refund on 13-12-2000.

3. The Tribunal analyzed the Customs Refund Application (Form) Regulation, 1995, which requires the proper officer to scrutinize refund applications. If found incomplete, the officer must return the application to the appellant for resubmission. In this case, since the application was not returned to the appellants for deficiencies, the original filing date of 5-1-2000 was deemed valid. Therefore, the provisions of Section 27A should apply after three months from the filing date, entitling the appellants to interest.

In conclusion, the Tribunal set aside the previous order and allowed the appeal in favor of the appellants, granting them consequential relief. The judgment emphasized the importance of compliance with regulations for refund claims and clarified the entitlement to interest on refunded duty as per Section 27A of the Act.