2015 (10) TMI 190 - AT - Customs

Rejection of Interest on delayed refund payment Appellant imported goods during assessment of bills of entry Customs Duty was computed and was paid accordingly However bills of entry were re-asessed and consequent to said reassessment appellant filed refund claims for difference of duty between initial assessment and reassessment of bills of entry Refund claim was sanctioned to appellant belatedly by nearly two years however no interest was given Aggrieved with non-payment of interest appellant filed appeals which was rejected vide impugned order Held that - main ground for rejection of interest claim of appellant is that they have informed department for disclaimer of interest There is no statutory provision regarding filing of any undertaking or disclaiming interest on refund amount There is no dispute that refund was sanctioned almost after two years from date of filing of application Therefore appellant is entitled for interest On very issue of interest on refund Supreme Court in case of Ranbaxy 2011 (10) TMI 16 - Supreme Court of India held that wherever there is delay in sanction of refund beyond three months from date of application interest has to be paid to claimant Thus matter remanded to original adjudicating authority to consider claim of interest afresh Appeal allowed by way of remand Decided in favour of Assesse.

Summary

Issues:
Appeal against Order-in-Appeal regarding refund claim and interest on delayed sanction.

Analysis:
The case involves the appellant importing goods and paying duty as per initial assessment. Subsequently, a re-assessment was done, and the appellant filed refund claims due to the difference in duty. The refund was sanctioned after a delay of nearly two years without interest. The appellant then appealed for interest on delayed refund sanction. The Commissioner (Appeals) rejected the appeal citing the appellant's earlier disclaimer of interest. However, the Tribunal noted that there is no statutory provision for disclaiming interest on refund. Section 27(A) of the Customs Act entitles the appellant to interest if the refund is sanctioned beyond three months, which was the case here. The Tribunal held that the appellant is entitled to interest on the delayed refund.

The Additional Commissioner argued that the appellant's disclaimer of interest and subsequent withdrawal, along with deficiencies in the refund claim, justified the rejection of interest. However, the Tribunal found that the disclaimer had no legal basis as per the Customs Act. The Tribunal also highlighted that the deficiency in documents was not adequately addressed by the lower authority. Despite any document-related issues, the delay in refund sanction alone entitled the appellant to interest. Citing a Supreme Court case, the Tribunal emphasized that interest must be paid in cases of delayed refund sanction beyond three months.

Consequently, the Tribunal allowed the appeal by remanding the matter to the original adjudicating authority. The authority was directed to reevaluate the interest claim, considering the Tribunal's observations and providing a reasonable opportunity to the appellant. The judgment emphasized the appellant's entitlement to interest on the delayed refund sanction as per Section 27(A) of the Customs Act.