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2014 (5) TMI 332 - AT - CustomsInterest on delayed payment of refund of pre-deposit Remand Order - Bar of Limitation - Section 27A of the Customs Act Held that - Judgment in Sowbaghya Lakshmi Silicate v. CCE, Trichy 2009 (6) TMI 854 - CESTAT, CHENNAI followed Reliying upon Commissioner v. I.T.C. Ltd. 2004 (12) TMI 90 - SUPREME COURT OF INDIA - In case of remand also when refund of any pre-deposited amount accrues, then interest liability will also start from three months after the date of remand order which is also the clarification as per C.B.E. & C. Circular No. 802/35/2004 CX., dated 8-12-2004 - Interest to the appellant was due after three months from remand order dated 30-4-2002 and not after three months from 29-1-1998, the date of pre-deposit made by assessee Decided partly in favour of assessee.
Issues Involved:
Appeal against dismissal of refund claim and interest on delayed payment of refund under Section 27A of the Customs Act, 1962. Analysis: 1. The appellant filed an appeal against the dismissal of their refund claim of Rs. 25 lakhs deposited in January 1998, which was sanctioned in June 2007. The appellant sought interest on the delayed payment of the refund, which was rejected by the original adjudicating authority. The first appellate authority also rejected the appeal, citing Section 27A of the Customs Act, 1962, limiting interest liability to a period after three months from the refund application date. 2. The appellant's representative argued that interest should be paid from the CESTAT order date in 2002, not from the deposit date in 1998. They referenced a circular and a CESTAT judgment supporting interest payment after three months from the order vacating the demand. The advocate highlighted legal precedents from the Supreme Court and High Courts, emphasizing the entitlement to interest from three months after the CESTAT order. 3. The Revenue's representative contended that the refund claim was initially rejected due to lack of authorization, but later a refund claim was sanctioned in 2007. They argued that interest was not payable from the CESTAT order date in 2002 when the case was remanded, but from the date of the final refund payment. 4. The Tribunal noted that the appellant made the deposit during an investigation in 1998, which was later appropriated by the Commissioner. The CESTAT order in 2002 set aside the appropriation and remanded the case for reevaluation. The appellant claimed interest from the CESTAT order date in 2002, supported by a circular and a CESTAT judgment. 5. Referring to the circular dated 2004, the Tribunal highlighted that interest on pre-deposits should be paid within three months of the appeal's disposal in the assessee's favor. Citing the CESTAT judgment in a specific case, the Tribunal affirmed that interest should accrue from three months after the remand order, aligning with legal principles established by the Supreme Court and High Courts. 6. Consequently, the Tribunal allowed the appeal to the extent that interest was deemed payable from three months after the CESTAT remand order in 2002, not from the initial deposit date in 1998.
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