2020 (11) TMI 328 - AT - Customs

Interest on delayed Refund of excess Customs Duty paid - Benzothiazole - appellant paid the enhanced duty under protest - Section 27A of the Customs Act, 1962 - HELD THAT - Evidently, the Learned Commissioner has taken the date of receipt of Final Order of the Tribunal as the relevant date for calculation of interest to be paid on the refunded amount. This is clearly contrary to the provisions of Section 27A which has only one date for calculation of interest which is the date of refund application. If the refund is not paid within three months from the date of receipt of refund application interest has to be paid. The appellant is entitled to interest on the delayed refunds from three months from the date of receipt of refund application till the date of which the refund has actually been paid and order the Department to pay the interest - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Calculation of interest on delayed refunds under Section 27A of the Customs Act, 1962.

Analysis:
The appeal in this case was filed against an Order-in-Appeal dated 30.11.2018, concerning the enhancement of the assessable value of imported Benzothiazole. The appellant paid the enhanced duty under protest, and after a series of appeals, the Tribunal allowed the refund along with interest. However, the Assistant Commissioner sanctioned the refund but did not pay interest, leading to the current appeal regarding the payment of interest on the refunded amount.

The appellant argued that interest must be paid if the refund is not sanctioned within three months from the date of the refund application, as per the Customs Act. The Counsel emphasized that there is no provision to consider any other date, including the date of the Tribunal's Final Order, for calculating interest on the refund amount. Despite initially requesting interest on unpaid interest, the appellant later withdrew this request during the proceedings.

The Departmental Representative supported the findings of the impugned order, which stated that interest is not payable since the refund was made within three months from the date of the Tribunal's Order. The order relied on Section 27A of the Customs Act, which specifies the conditions for paying interest on delayed refunds.

Upon review, the Tribunal noted that the relevant date for calculating interest on delayed refunds is the date of the refund application, not the date of the Tribunal's Final Order. The Tribunal found that the appellant was entitled to interest on delayed refunds from three months after the refund application date until the actual payment date. Therefore, the Department was ordered to pay the interest owed to the appellant.

In conclusion, the Tribunal allowed the appeal and directed the Department to pay the interest on delayed refunds as per the provisions of Section 27A of the Customs Act, 1962.