2009 (10) TMI 819 - AT - Customs

Summary

Issues:
1. Refund claim for excess duty paid on imported Plain Polypropylene Films.
2. Eligibility for interest on late refund.
3. Application of provisions for interest retrospectively.

Analysis:
1. The respondents filed a refund claim for excess duty paid on Plain Polypropylene Films imported on a specific date. The department rejected the refund claim after finalizing provisional assessment by adopting an enhanced value. The matter reached the Tribunal, which held that the transaction value declared by the respondents should be accepted, and the refund claim should be considered after examining the principle of unjust enrichment. The Commissioner (Appeals) held that the appellant is eligible for interest for the delay beyond three months of the order dated 19-3-1997.

2. The Revenue appealed against the Commissioner (Appeals) order, arguing that provisions for interest for late refund were inserted with effect from a specific date and cannot be applied retrospectively. The respondents contended that they are entitled to a refund since 1992 as the department held the money throughout this period. The respondents accepted the order of the Commissioner (Appeals) despite it allowing interest only from a later date to end the litigation.

3. The Tribunal considered the submissions and observed that the provisional assessment was finalized on a specific date, and the refund claim should be treated as arising from this finalization. The Tribunal's earlier order rejecting the appeal filed by the Revenue had attained finality. The order of the Commissioner (Appeals) related to the refund claim only and was passed on 19-3-1997, allowing the refund. The refund sanctioning authority needed to examine only the unjust enrichment aspect. Since there was no stay against the order, the Revenue was required to refund the amount within three months from the date of the order. The Tribunal concluded that the claim for refund of duty on finalization of provisional assessment was not valid, and the refund should be given from the date of the Commissioner (Appeals) order. The appeal filed by the Revenue was rejected as lacking merit.