2014 (12) TMI 443 - HC - Customs

Interest on delayed refund - Refund of CVD paid despite exemption notification unjust enrichment - whether the first respondent/assessee is entitled to claim interest from the date of application with regard to the amount which is refundable - Held that - Even from a mere reading of the said Section, it is easily discernible that refund of excess duty should be paid within a period of three months from the date of receipt of an application and if no such refund is made within the stipulated period of three months, the applicant/assessee is entitled to get interest from the date of filing of such application - every application for refund of excess duty has to be considered within a period of three months and the refund should be made within that period and if no such refund is made, the applicant/assessee is entitled to get interest from the date of filing application. Under the said circumstances, in Section 27(A) of the said Act, the words from the date of receipt of such application have been used. Therefore, it is quite clear that the residual contention put forth on the side of the appellant cannot be accepted. It has already been pointed out that the Appellate Tribunal, as per the provision of the said Section, has rightly awarded interest and in view of the discussions made earlier, this Court has not found any error in the order passed by the Appellate Tribunal and further the substantial question of law settled on the side of the appellant is not having substance at all and altogether the present civil Miscellaneous Appeal deserves to be dismissed. - Decided against Revenue.

Summary

Issues:
Entitlement to interest from the date of application for refund of excess customs duty.

Analysis:
The Civil Miscellaneous Appeal was filed against the Final Order of the Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai. The dispute revolved around the entitlement of the first respondent to claim interest from the date of application for the refund of excess customs duty. The Commissioner of Customs, as the appellant, challenged the order passed by the Appellate Tribunal, which allowed interest from the date of application.

The substantial question of law settled for consideration was whether the Tribunal was correct in awarding interest from the period immediately succeeding three months from the filing of the refund application. The appellant contended that interest should only be granted from the date of the Appellate Tribunal's order, as per Section 27(A) of the Customs Act, 1962.

The first respondent argued that as per Section 27(A) of the Customs Act, 1962, if an application is made for a refund, it should be processed within three months. Failure to refund within this period entitles the applicant to interest from the date of the application. The Court examined Section 27(A) of the Act, which clearly stated the entitlement to interest from the date immediately after three months from the application date if the refund is delayed.

The Court found that the Appellate Tribunal correctly awarded interest from the date of the application, in line with the provisions of Section 27(A). The argument that interest should only be granted after three months from the application date was rejected. The Court emphasized that the words "from the date of receipt of such application" in the Act supported awarding interest from the application date itself.

In conclusion, the Civil Miscellaneous Appeal was dismissed, upholding the Appellate Tribunal's order to award interest from the date of the application. The Court found no error in the Tribunal's decision and rejected the appellant's contention, leading to the dismissal of the appeal without costs.