2024 (5) TMI 530 - AT - Customs

Interest for delay in sanction of refund - transaction value of imports - Imports of Polyester Spun Yarn - HELD THAT - As observed the amount in question in the present case is no more remains to be an amount of customs duty nor it is an amount of pre-deposit the amount is merely a deposit with Revenue which Revenue has no authority to retain. The appellant being the owner of the said amount. As per Article 300A of the Constitution of India also no person shall be deprived of his property save by authority of law. Once the self assessed value of the appellant has been accepted the differential duty which was already recovered from the appellant cannot be called as the amount of duty or the amount collected under the authority of law. It definitely is the property of the appellant which remained with the department since the day of the deposit. Hon ble Apex Court in the case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax-I 2006 (1) TMI 55 - SUPREME COURT has held the assessee to be entitled to claim interest from the date of payment of initial amount till the date of its refund. Relying upon these decisions as discussed above I hold that the appellant herein is entitled to claim the interest on three of the amounts as have already been refunded to him. The interest shall accrue from the date of the payment of the said amount with the department. Keeping in view of this tribunal in the case of M/s S. S. Dyes Chemicals 2015 (11) TMI 1393 - CESTAT MUMBAI and the fact that the amount is lying deposited with the department since the Year 2013 I deem it to be a fit case for the interest to be awarded to the appellant on three of the amounts already refunded at the rate of 12% per annum to be calculated from the date of payment of the said amount till the disbursement thereof. Thus the order is hereby is modified to the extent as mentioned. The appeals stands accordingly disposed off.

Summary

Issues involved:
The issues involved in the judgment are the entitlement of interest on refunded amounts u/s Section 27A of the Customs Act, 1962, and the determination of the applicable rate of interest.

Entitlement of Interest on Refunded Amounts:
The appellant had filed a refund claim for interest due to delay in sanctioning the refund amounts under Section 27A of the Customs Act. The original adjudicating authority rejected the claim, stating that the interest was not payable. The appellant contended that the differential duty amounts deposited during import were ultimately refunded without interest, despite the refund attracting interest from the date of deposit. The Tribunal held that the refunded amounts were revenue deposits with the department since the date of payment, and interest should have been paid from the date of deposit till disbursement. Citing legal precedents, including a case involving the refund of excise duty, the Tribunal ruled in favor of the appellant's entitlement to interest on the refunded amounts.

Determination of Applicable Rate of Interest:
The Tribunal considered the rate of interest to be awarded on the refunded amounts. While the Customs Act prescribed a range of interest rates under Section 27A, the appellant argued for a higher rate based on subsequent notifications. The Tribunal noted that the Commissioner (Appeals) had already held the appellant entitled to interest at applicable rates. Considering the facts of the case and the range of interest rates allowed by law, the Tribunal found it reasonable to award interest at a rate of 12% per annum on the refunded amounts. The judgment modified the original order to reflect the awarded rate of interest.