2023 (12) TMI 534 - AT - Customs

Denial of interest on the refund (of SAD) sanctioned - HELD THAT - The effect of Section 11BB is that when any duty ordered to be refunded, is not refunded within three months from the date of receipt of application, then there shall be paid interest at the applicable rates from the date immediately after the expiry of three months from the date of receipt of application for refund until the date of refund of such duty. The appellants are entitled to the interest on refund since the claim of the appellants is relatable to the date of its applications, and not the date of compliance with the query raised by the Revenue. Going by the said dates of applications, the refund sanctioned vide Orders-in-Original dated 01.04.2013 are clearly beyond the prescribed period of three months. There are no reasons to sustain the impugned orders of the first appellate authority, for which reason the impugned Order-in-Appeal Nos. 135 136/2013 dated 16.07.2013 and Order-in-Appeal Nos. 141 142/2013 dated 30.07.2013 are set aside - appeal allowed.

Summary

Issues Involved:
The appeal challenges the rejection of interest on refunds by the first appellate authority.

Refund Claims:
Two appellants filed refund claims for Additional Duty of Customs (SAD) on specific dates. The refund was sanctioned by Orders-in-Original dated 01.04.2013.

Key Issue:
The main issue is whether the appellants are entitled to interest on the refund as claimed by them.

Facts and Findings:
The first appellate authority rejected the interest claim, stating that the refunds were sanctioned within the prescribed three-month period. The appellants disputed this rejection and filed appeals.

Legal Interpretation:
The CESTAT bench referred to relevant legal provisions, including Section 11BB of the Central Excise Act, which mandates interest payment if refunds are not issued within three months of the refund application. The bench cited precedents supporting the payment of interest on delayed refunds.

Decision:
The CESTAT held that the appellants were entitled to interest on the refunds as the Orders-in-Original were issued beyond the three-month period from the date of the refund applications. Consequently, the orders of the first appellate authority were set aside, and the appeals were allowed with consequential benefits.


Note:
The judgment was pronounced by the CESTAT Chennai on 12.12.2023 with Mr. P. Dinesha and Mr. M. Ajit Kumar as the members.