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2015 (11) TMI 1393 - AT - CustomsClaim interest on delayed refund - refund amount is in the nature of duty or not - Held that - Though the appellant made the payment of the impugned amount at the time of investigation, the said payment was confirmed as duty vide order dated 1-5-1996 and the said payment was appropriated towards duty demand. Therefore there is no doubt on the pint that what has been paid by the appellant has been adjusted towards duty and it is not a mere pre-deposit as canvassed by the revenue. - it is seen that the appellant had filed refund applications dated 12-9-1994 claiming a total refund of ₹ 30,53,905/-. Therefore, the provisions of Section 27A of the Customs Act, 1962 is clearly attracted and the said section provides for grant of interest on the expiry of three months from the date of refund application till the date of grant of refund irrespective of when the order for refund was actually passed. The ratio of the judgment of the Hon ble Apex Court in the case of Ranbaxy Laboratories cited 2011 (10) TMI 16 - Supreme Court of India and of the Hon ble High Court of Bombay in Voltas (2004 (9) TMI 116 - HIGH COURT OF JUDICATURE AT BOMBAY) would apply to the facts of the case. However, since Section 27A of the Customs Act itself came into force only in May, 1995 and the appellant has claimed the interest for the period from 1-12-1995 onwards, we are of the view that the appellant is rightly entitled for interest at the applicable rates from 1-12-1995 onwards till the date of actual payment of refund - Decided in favour of assessee.
Issues:
1. Claim for interest on delayed refund of duty. 2. Interpretation of payment as duty or pre-deposit. 3. Applicability of Section 27A of the Customs Act, 1962. 4. Entitlement to interest on delayed refund. Analysis: Issue 1: Claim for interest on delayed refund of duty The appeal challenged the dismissal of the applicant's claim for interest on a delayed refund of duty amounting to Rs. 30,53,905/- by the Commissioner of Customs (Appeals), Mumbai-I. The appellant imported consignments of citric acid under a DEEC license and faced a less charge demand in 1994, leading to payment of the disputed duty amount. The lower appellate authority denied interest on the refund, considering the payment as a pre-deposit. The appellant contended that the payment was confirmed as duty under Section 28 of the Customs Act, 1962, and filed a refund claim in 1994. The appellant argued for interest under Section 27A of the Customs Act, relying on relevant judgments and legal provisions. Issue 2: Interpretation of payment as duty or pre-deposit The appellant asserted that the payment made in 1994 was towards the duty confirmed under Section 28 of the Customs Act, not a mere pre-deposit, as contended by the revenue. The lower adjudicating authority's consideration of unjust enrichment before granting the refund indicated that the amount paid was in excess of duty. The Tribunal found that the payment was adjusted towards duty demand, justifying the appellant's claim for interest on the delayed refund. Issue 3: Applicability of Section 27A of the Customs Act, 1962 The Tribunal analyzed the applicability of Section 27A of the Customs Act, 1962, which provides for interest on delayed refunds. Considering the appellant's refund application in 1994 and the insertion of Section 27A in December 1995, the Tribunal concluded that the appellant was entitled to interest from December 1995 onwards till the actual payment of the refund. The Tribunal referred to relevant case laws and legal provisions to support its decision. Issue 4: Entitlement to interest on delayed refund The Revenue argued that the payment made by the appellant was a deposit, not duty, hence denying interest under Section 27A. However, the Tribunal's scrutiny of the case records confirmed that the payment was adjusted towards duty, making the appellant eligible for interest on the delayed refund. Citing precedents and legal principles, the Tribunal allowed the appeal, granting the appellant interest at applicable rates from December 1995 till the date of actual refund payment. In conclusion, the Tribunal upheld the appellant's claim for interest on the delayed refund of duty, emphasizing the nature of the payment as duty and the applicability of Section 27A of the Customs Act, 1962. The decision aligned with relevant legal provisions and established precedents, ensuring the appellant's entitlement to interest as per the law.
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