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Issues:
- Correctness of the impugned order allowing payment of interest to the respondents. - Interpretation of the provisions of Section 61(2) of the Customs Act regarding calculation of interest rates. - Decision on refund claim based on the applicable interest rates at different times. Analysis: The appeal before the Appellate Tribunal CESTAT, New Delhi involved the revenue contesting the correctness of an order allowing the payment of interest to the respondents. The respondents, engaged in the manufacture of Master Colour Batches, procured goods under bond from the port of importation and stored them in bonded warehouses. They paid duty and interest leviable on the goods before taking delivery. A refund claim of Rs. 33,551/- was filed by the respondents, alleging that an incorrect interest amount had been charged. The adjudicating authority partially allowed the refund, leading the respondents to appeal for the balance amount. The Commissioner (Appeals) granted the refund, citing different interest rates applicable at the time of storage and clearance of goods. Upon review, the Tribunal found that the interest rate was 24% when the goods were stored but reduced to 15% at the time of clearance. The Commissioner (Appeals) had erred in interpreting Section 61(2) of the Customs Act, stating that interest should only be calculated at the rate prevailing during clearance. The correct approach was to calculate interest at both rates to determine the total payable. Consequently, the Tribunal set aside the order granting the refund, affirming the adjudicating authority's calculation method as accurate. The decision emphasized the necessity to consider the varying interest rates applicable during storage and clearance, ultimately allowing the revenue's appeal and denying the refund to the respondents. In conclusion, the Tribunal's judgment clarified the proper calculation of interest rates under Section 61(2) of the Customs Act, highlighting the significance of applying the correct rates based on the specific timelines of storage and clearance of goods. The ruling underscored the importance of adherence to statutory provisions in determining refund claims related to interest payments, ensuring consistency and accuracy in financial assessments within the customs framework.
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