2020 (1) TMI 384 - HC - Customs

Interest on delayed payment of Special Additional Duty refundable - N/N. 102 of 2007-Cust dated 14.9.2007 - HELD THAT - The reasoning in the impugned order is contrary to the scheme of the Customs Act, 1962. The exemption notification issued under Section 25A merely relaxes the condition from levy of tax. Refund of Duty is stipulated therein subject to the conditions. Procedure for refund of Duty is governed by Section in 27 and the payment of interest on delayed payment thereon under Section 27A of the Customs Act. The notification cannot be read in isolation of the Customs Act, 1962. If there is delay in payment of any refund claim, the 2nd respondent is duty bound to pay the interest in terms of Section 27A of the Customs Act - At the same time, since the decision of this Court rendered in KSJ Metals Impex (P) Ltd 2013 (6) TMI 148 - MADRAS HIGH COURT has been stayed I am unable to give any relief to the petitioner at this stage. The respondent shall pass appropriate orders as and when the division Bench dispose KSJ Metals Impex (P) Ltd case, unless there is an earlier decision of the Hon'ble Supreme Court on the very same subject - Petition disposed off.

Summary

Issues:
- Delayed payment of Special Additional Duty refund
- Rejection of refund claims
- Appeal before the Appellate Commissioner
- Appeal before the Customs, Excise And Service Tax Appellate Tribunal
- Claim for interest on delayed payment
- Judicial precedents and stay orders affecting the case
- Legal interpretation of Notification No. 102 of 2007-Customs
- Applicability of Sections 27 and 27A of the Customs Act, 1962
- Division Bench decisions from Delhi and Bombay High Courts
- Interference with the impugned order
- Remitting the case back for fresh orders

Analysis:
The petitioner imported metal scrap and sold it below the declared value, leading to rejected refund claims for Special Additional Duty under Notification No. 102 of 2007-Customs. After appeals, the Customs, Excise And Service Tax Appellate Tribunal allowed the petitioner's appeal based on a larger bench decision. The petitioner sought interest on delayed refund payment under Section 27A of the Customs Act, 1962, but the respondent rejected the claim, citing the notification's provisions and lack of interest provision. The respondent also referred to stay orders on related cases from the High Courts of Madras, Delhi, and Bombay.

The petitioner argued that the stay on the Delhi High Court's decision did not negate the claim for interest, citing persuasive value. The Delhi High Court's decisions in similar cases supported the claim for interest despite stay orders. The respondent contended that the impugned order was well-reasoned and that the petitioner's appeal to the Commissioner of Customs (Appeals) was pending, seeking dismissal of the writ petition.

The Court found the impugned order contrary to the Customs Act, emphasizing the duty to pay interest on delayed refund claims under Section 27A. Despite the stay on a related case, the Court set aside the impugned order and remitted the case back for fresh orders, awaiting the division Bench's decision. The Court directed the respondent to pass a new order considering the observations made, ensuring the petitioner's right to be heard in the process. The writ petitions were disposed of accordingly, with no costs incurred, and connected miscellaneous petitions were closed.