2005 (11) TMI 159 - AT - Customs

Summary

Issues: Refund of duty for damaged goods during warehousing period, entitlement to interest on the refunded amount.

Analysis:
1. Refund of Duty for Damaged Goods: The case involved an appeal against an order-in-appeal passed by the Commissioner (Appeals) regarding the refund of duty for damaged goods during the warehousing period. The appellants imported seven induction furnaces in 1979, which were warehoused. Upon noticing damage to the goods, they applied for a survey to assess the cost of the damaged goods under Section 22 of the Customs Act. The survey valued the damaged goods at Rs. 3.5 lakhs. The appellants paid duty without waiting for the survey report and obtained clearance of the goods. The adjudicating authority allowed a refund of Rs. 3,16,777, which was later challenged through a show cause notice for recovery of the erroneous refund. The Commissioner (Appeals) modified the order, stating that the refunded amount was not liable to be recovered from the appellant. The appellant contended that they were entitled to a refund of Rs. 4,71,120.32. However, the tribunal found that the refund was made based on the survey report before clearance, and as the goods were assessed before clearance, the excess duty paid was refunded. Therefore, the tribunal dismissed the appeal on this issue.

2. Entitlement to Interest on Refunded Amount: The appellant also claimed entitlement to interest on the refunded amount. The tribunal noted that the refund was filed in 1982 for damaged goods during the warehousing period. However, as per the provisions of the Customs Act, there were no provisions for granting interest in such cases. The tribunal found no merit in the appellant's claim for interest on the refunded amount. Consequently, the tribunal dismissed the appeal on this ground as well.

In conclusion, the appellate tribunal upheld the decision of the Commissioner (Appeals) regarding the refund of duty for damaged goods during the warehousing period and the denial of interest on the refunded amount. The tribunal found no legal basis to grant additional relief to the appellant beyond the refund already provided based on the survey report conducted before the clearance of the goods.