2022 (10) TMI 814 - AT - Customs

Rejection of entitlement for interest on delayed sanction of refund claim - benefit of section 27A of Customs Act, 1962 - HELD THAT - It is seen that the first appellate authority has interpreted the time limit in section 27A of Customs Act, 1962 according to the letter of the law which mandates liability of interest for any delay in sanction of refund beyond three months from date of claim. It is on record that there has been delay beyond the stipulated period of three months. There is no reason for interfering with the impugned order - the appeal of Revenue is dismissed.

Summary

Issues:
1. Entitlement for interest on delayed sanction of refund claim under section 27A of Customs Act, 1962.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI pertains to an appeal by the Revenue against the order-in-appeal of the Commissioner of Customs (Appeals), Mumbai II, JNCH, Nhava Sheva. The claimant, M/s. Pidilite Industries Ltd, had sought a refund of differential 'additional duty' amounting to Rs.42,46,426/- and Rs.28,47,836/- on two separate occasions. The claim arose from the incorrect assessment of bills of entry by the assessing officer, which was subsequently rectified by the Tribunal. The claimant also requested interest on the delayed sanction of the refund, invoking section 27A of the Customs Act, 1962.

The Learned Authorised Representative argued that the refund was processed within the prescribed three-month limit after re-assessment as directed by the Tribunal. On the other hand, the Company Representative for the respondent contended that the refund was not released automatically but upon their application following the Tribunal's decision. Reference was made to legal precedents, including judgments by the Hon'ble High Court of Madras and the Hon'ble Supreme Court, to support their position that interest should be granted under section 27A.

The Appellate Tribunal noted that the first appellate authority correctly interpreted the time limit under section 27A, which imposes liability for interest on delays exceeding three months from the date of the claim. As there was a delay beyond the stipulated period, the Tribunal upheld the order allowing interest on the delayed refund. Consequently, the appeal by the Revenue was dismissed, and the cross-objection was also disposed of.

In conclusion, the judgment affirms the claimant's entitlement to interest on the delayed sanction of the refund under section 27A of the Customs Act, 1962. The decision underscores the importance of adhering to statutory timelines for refund processing and upholds the principles of fair treatment and compensation for delays in administrative procedures related to customs matters.