2016 (12) TMI 701 - AT - Customs

Refund sanctioned to be paid - Rule 41 of CESTAT Procedure Rules - Held that - Once the Revenue loses its right to retain sums which are not due to it, as per an order of any appellate forum, be it the Commissioner (Appeals), Tribunal or the High Court, it has to become vigilant in either refunding it back to the assessee or obtaining an order from the higher forum for stay of such refund. It goes without saying that the Revenue must weigh the pros and cons of seeking a stay against implementation of the order of the lower appellate authority as there will be interest liabilities that the Revenue will have to discharge ultimately if its challenge before the higher appellate forum does not succeed. Ld. Departmental Representative submits that they be given another chance to move the Hon ble High Court for expeditious hearing of the stay petition as soon as the Hon ble High Court reopens after Diwali vacation, though we are not convinced with such an argument in the absence of inactivity from January 2014. However, in the interest of justice, respecting the word of the Id. Departmental Representative, we adjourn these applications to 28.11.2016 to give revenue an opportunity, to either get a stay order from Hon ble High Court or implement our orders by sanctioning the refund to applicants herein. Ld. Departmental Representative is specifically instructed to apprise the bench about the action - Matters adjourned to 28.11.2016.

Summary

Issues:
1. Implementation of Tribunal's final order regarding duty demand, confiscation, and penalties.
2. Refund application by importers for amounts deposited during investigation.
3. Delay in sanctioning refund claims despite no stay order from the High Court.

Analysis:
1. The applicants filed applications for the implementation of the Tribunal's final order dated 10.07.2013, which partly upheld duty demands, confiscation, and penalties for vessels. Appeals were filed by both revenue and importers before the High Court. The High Court admitted an appeal by J.M. Baxi & Con and granted interim stay against the operation of the order regarding the vessel Smith Borneo. Despite no stay on revenue's appeals, refund claims by importers were not sanctioned, leading to the current applications for implementation.

2. The refund claims by importers, revised after the Tribunal's order, faced procedural objections that were addressed. However, despite three years passing since the Tribunal's order and no stay from the High Court, the refund claims remained unsanctioned. The applicants' counsel highlighted the lack of response to letters and reminders sent to the refund sanctioning authority, prompting the applications for implementation under Rule 41 of CESTAT Procedure Rules.

3. The Revenue's delay in implementing the Tribunal's order by granting refunds or seeking a stay from the High Court was noted. The Revenue filed a Notice of Motion in August 2016, seeking adjournments and citing pending consideration before the High Court. However, the Tribunal criticized the belated filing of the Notice of Motion after more than two years of delay in refund sanctioning. Board circulars emphasized the need for expeditious refund grant to avoid interest liabilities, with repeated delays burdening the exchequer and indicating negligence on the Revenue's part.

4. The Tribunal underscored the Revenue's responsibility to promptly refund amounts not due or obtain stay orders from higher forums. The Revenue's failure to act diligently in refund matters, despite no stay order, was deemed judicial indiscipline. Citing a High Court decision, the Tribunal emphasized the binding effect of its orders even if matters are pending in higher courts. The Revenue was given an opportunity to secure a stay order or implement the Tribunal's orders by the next hearing date, stressing the importance of timely action to avoid interest liabilities and serve justice.