2009 (9) TMI 828 - HC - Customs

Interest on delayed refund of dumping duty - Held that - The assessing authority had thus rightly granted 9% interest. In any event the appeal and the revisional application of the Department have been rejected. Even though the Department has appealed to the Tribunal there is no order of stay. The respondent-authorities cannot indefinitely withhold interest, merely by filing an appeal, and more so when there is no interim stay. The respondent-authorities are bound to pay interest in terms of the order dated 11th July, 2008. W.P. allowed.

Summary

Issues:
Challenge to notice on delayed refund of dumping duty interest.

Analysis:
The petitioner challenged a notice alleging an excess refund amount paid on delayed refund of dumping duty. The disputes arose regarding the imposition of anti-dumping duty on consignments of Styrene Butadin Co-polymer Resins imported by the petitioner. The Designated Authority found anti-dumping duty leviable on Styrene Butadine Rubber (SBR) based on a Central Government notification. However, the petitioner claimed to have imported KHS-68, a different article not liable to anti-dumping duty, classified under a different sub-heading than SBR. A writ application challenging the dumping duty imposition was initially dismissed by Justice Pinaki Chandra Ghose, but an appeal allowed by a Division Bench directed refund of the duty paid under protest.

The Division Bench held that the appellant was entitled to claim a refund of the duty paid under protest, directing the authority to dispose of the refund application within a month. The petitioner deposited the anti-dumping duty under protest, and upon the appeal's success, applied for a refund. The Division Bench also mentioned the entitlement of interest on the deposit at the prevailing bank rate. The petitioner, after applying for the refund, moved a contempt application due to non-action by the authorities. The Assistant Commissioner ultimately awarded interest on the deposited duty at 9% per annum.

The respondent authorities produced an order allowing the refund application but denied interest. The Division Bench disposed of the contempt application, granting liberty to accept the refund without prejudice to further rights. The Assistant/Deputy Commissioner awarded interest at 9% per annum on the deposited anti-dumping duty. Despite Departmental appeals and revisional applications, the order for interest payment was upheld, and the petitioner sought release of the interest amount.

The writ petitioner argued that the Appellate Authority rightly rejected the Department's appeal as barred by limitation. The respondent authorities contended that interest should be paid at 6% per annum after three months from the refund application. However, the Division Bench's order directed interest payment at the prevailing bank rate, justifying the 9% interest granted by the assessing authority. The Court held that the respondent authorities must pay interest as per the July 11, 2008 order, allowing the writ application, setting aside the notice, and directing the release of interest.

In conclusion, the High Court allowed the writ application, setting aside the notice and directing the release of interest in accordance with the Assistant Commissioner's order.