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2010 (9) TMI 346 - AT - CustomsRefund Adjustment against pending dues Liability settled subsequently and Department asking assessee to file refund claim Amount adjusted whether pre deposit or duty payment - Therefore the observations of the Commissioner (Appeals) in his order in para 5.2(ii) that the amount recovered by the proper officer by adjustment cannot be considered as a pre-deposit but to be considered as a differential duty is not supported either by law or by the circulars issued by the Board No question of filing refund claim, letter being already submitted to the Assistant Commissioner to make payment on 9-7-96 Interest Delayed refund- Refund adjusted against pending dues Issued decided in assessee s favour subsequently by Tribunal on 20-05-1996 Amount adjusted held as pre-deposit The amount which was deposited by assessee held to be refunded by the department suo-moto or on a letter filed by the assessee and the department liable to interest @ 12% in view of precedent decisions
Issues Involved:
1. Whether the amount of Rs. 4,71,447/- adjusted against refunds due to the appellant can be treated as a pre-deposit or duty paid. 2. Whether the appellant is entitled to a refund of Rs. 4,71,447/- without filing a refund claim under Section 27 of the Customs Act, 1962. 3. Whether the appellant is entitled to interest on the refunded amount from 20-8-96 till the date of actual payment. Issue-wise Detailed Analysis: 1. Treatment of Adjusted Amount: The primary question was whether the amount of Rs. 4,71,447/- adjusted against refunds due to the appellant should be considered as a pre-deposit or duty paid. The Revenue contended that the amount was adjusted as duty payable before any appellate direction, thus necessitating a refund claim under Section 27 of the Customs Act. The Commissioner (Appeals) supported this view, emphasizing that a refund claim was necessary to examine unjust enrichment and the correctness of the claim. However, the Tribunal found that the amount recovered by adjustment should be treated as a pre-deposit made during the pendency of the appeal, not as a formal duty payment. This interpretation aligns with the Board's Circulars dated 2-1-02 and 8-12-04, which state that pre-deposits made under Section 129E of the Customs Act must be returned if the appellant succeeds in appeal or the matter is remanded for fresh adjudication. 2. Requirement of Filing Refund Claim: The Tribunal examined whether the appellant needed to file a refund claim under Section 27 of the Customs Act for the amount of Rs. 4,71,447/-. The Tribunal referenced several decisions, including Voltas Ltd. v. UOI and Krishna & Co. v. CCE, Jaipur, which established that once an order demanding duty is set aside, the amount adjusted should be refunded suo-motu without requiring a new refund claim. The Tribunal concluded that the appellant's letter dated 9-7-96 requesting a refund sufficed, and the department was obligated to refund the amount by 20-8-96. Therefore, the decision of the lower authorities that the appellant was not eligible for a refund until the final order dated 30-6-09 was deemed unsustainable. 3. Entitlement to Interest: The Tribunal also addressed whether the appellant was entitled to interest on the refunded amount. The Tribunal cited multiple decisions, including Max India Ltd. v. CC, New Delhi, and Jindal Electric & Machinery Corpn. v. CCE, Ludhiana, which held that interest at 12% per annum is payable on pre-deposits from the date of expiry of three months from the Tribunal's order until the date of payment. Applying these precedents, the Tribunal determined that the department was liable to pay interest at 12% on the refunded amount from 20-8-96 until the date of actual payment. Conclusion: The Tribunal set aside the impugned order and directed the Revenue to refund the amount of Rs. 4,71,447/- to the appellant without requiring a further application under Section 27 of the Customs Act. Additionally, the Tribunal ordered the Revenue to pay interest at 12% per annum from 20-8-96 until the date of payment, adhering to the principles established in previous judicial decisions and the Board's circulars.
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