2018 (12) TMI 1856 - AT - Customs

Interest on delayed refund - appellant submitted that the amount in question deposited by the appellant during the course of investigation was neither a duty of Customs nor pre-deposit made pursuant to any order passed by the department - Section 128 of Customs Act - HELD THAT - Insofar as filing of appeal before the Appellate Tribunal is concerned Section 129A of the Act mandates that an order passed by the Commissioner (Appeals) under Section 128A of the Act can be appealed against before the Tribunal. Thus the appellant has correctly filed the present appeal before the Tribunal. Shri Mondal has expressed his view point that the appellant has raised altogether the new ground before the Tribunal which was not urged at the first appellate stage and thus the appeal is not maintainable before the Tribunal. We are not in agreement with such submissions made by the Learned Special Counsel inasmuch as the issue dealt with by the Learned Commissioner (Appeals) in the impugned order concerning the period for entitlement of the interest amount was only agitated by the appellant through this present appeal - Even otherwise in terms of Rule 10 of the CESTAT (Procedure) Rules 1982 the Tribunal is empowered to consider new plea or grounds involving question of law urged at the time of hearing of appeal. The interest amount is payable from the expiry of three months of the order of Hon ble Bombay High Court i.e. from 15-10-2015 to the payment of refund - appeal is allowed in favour of the appellant holding that it should be entitled for the interest amount from May 1986 to 22-12-2015 as quantified by the Original authority.

Summary

Issues Involved:
1. Validity of the review order under Section 129D(2) of the Customs Act, 1962.
2. Entitlement of interest on the refunded amount from the date of deposit to the date of actual refund.

Issue-wise Detailed Analysis:

1. Validity of the Review Order under Section 129D(2) of the Customs Act, 1962:
The appellant argued that the amount deposited during the investigation was neither a customs duty nor a pre-deposit made pursuant to any order by the department. The appellant claimed a refund based on a favorable High Court order dated 15-7-2015, which quashed the show cause notice and allowed the appellant to seek recovery of the deposited amount with interest. The Assistant Commissioner sanctioned the refund along with interest, but the Commissioner of Customs reviewed this order under Section 129D(2) and directed an appeal before the Commissioner (Appeals). The Tribunal found that the amount deposited was not considered as 'duty' or 'pre-deposit' under the Customs Act, 1962. Thus, the review order under Section 129D(2), which only applies to decisions or orders under the Act, was deemed erroneous and not maintainable.

2. Entitlement of Interest on the Refunded Amount:
The primary contention was the period for which the appellant was entitled to interest on the refunded amount. The appellant claimed interest from the date of deposit (May 1996) till the actual refund date (22-12-2015). The Commissioner (Appeals) limited the interest period from 15-10-2015 (three months after the High Court order) to 22-12-2015. The Tribunal noted that the amount deposited was not adjudicated as customs duty and was kept in a suspense account. The High Court order explicitly allowed the appellant to seek recovery of the deposited amount with interest. As the show cause notice was quashed and no adjudication occurred, the Tribunal held that the appellant was entitled to interest from the date of deposit to the date of refund. The Tribunal cited that the order dated 15-7-2015 by the High Court was clear and should not be interpreted to deny the interest benefit.

Conclusion:
The Tribunal concluded that the review order under Section 129D(2) was invalid as the refund order was not under the Customs Act, 1962. It also held that the appellant was entitled to interest from the date of deposit (May 1996) to the date of refund (22-12-2015). The appeal was allowed in favor of the appellant, and the impugned order limiting the interest period was set aside.