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2005 (12) TMI 277 - HC - CustomsPayment of interest in case of delay in refund excess duty paid under protest - appellant filed the application for refund of the claim in terms of Section 27(1) of the Act on 28th September, 1987 - after fighting the legal battle for more than twelve years, the appellant got the relief from the Tribunal by an order dated 9th February, 1998 with a direction for refund to the appellant, by setting aside department s plea of unjust enrichment - in view of the explanation added to Section 27(A) of the Act, the order passed by the Tribunal should be deemed to be an order passed under sub-section (2) of Section 27 for the purpose of Section 27(A) dealing with interest - According to Section 27(A) of the Act, if the duty ordered to be refunded in terms of sub-section (2) of Section 27 is not refunded within three months from the date of receipt of application under sub-section (1) of Section 27, the interest is payable in terms of Section 27(A) - Therefore, the Tribunal below wrongly proceeded as if the date of filing of the claim was December 22, 1998. We have already pointed out that refund claim was really made on 28th September, 1987, but having filed such application before the date of assent of the President to Finance Bill, 1995, in view of proviso to the Section 27(A) of the Act, the appellant will be entitled to get interest from the date immediately after expiry of three months from the date when President gave assent to the Finance Bill, 1995 till the date of actual payment, namely, 25th February, 1999.
Issues:
1. Entitlement to interest under Section 27(A) of the Customs Act, 1962. Analysis: The appeal before the High Court of Calcutta involved a dispute regarding the entitlement to interest under Section 27(A) of the Customs Act, 1962. The appellant had imported polystyrene resin in 1987 and sought clearance under a specific tariff sub-heading. Subsequently, a refund was claimed, leading to a series of legal proceedings spanning several years. The Customs Authorities initially denied the refund, leading to appeals and remands. Ultimately, the Tribunal allowed the appellant's appeal in 1998, directing a refund. However, the issue arose regarding the payment of interest on the delayed refund. The Tribunal had dismissed the appellant's appeal for interest, citing the date of document submission as a basis for denying interest under Section 27(A) of the Act. The High Court analyzed the provisions of Section 27(A) of the Act, which stipulate the payment of interest on delayed refunds. The Court noted that the appellant had filed the refund application in 1987, and the Tribunal's order in 1998 should be deemed as an order under Section 27(2) for the purpose of Section 27(A). The Court emphasized that interest would be payable if the duty ordered to be refunded is not repaid within three months of the application. However, a proviso to Section 27(A) was introduced before the Finance Bill, 1995 received the President's assent, affecting the calculation of interest. The High Court held that the appellant was entitled to interest from the date after the President's assent to the Finance Bill, 1995 until the actual payment date in 1999. The Court clarified that the Tribunal had erred in considering the claim filing date as December 1998, whereas the correct date was 1987. The Court allowed the reference, ruling in favor of the appellant's entitlement to interest as per the provisions of Section 27(A) of the Act. The judgment was delivered by Justice Bhaskar Bhattacharya, with agreement from Justice Arun Kumar Bhattacharya. The Court also refused a stay on the order and directed the issuance of a certified copy of the judgment to the parties.
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