2025 (1) TMI 87 - AT - Customs

Interest on delayed refund of the Anti-Dumping Duty (ADD) deposited during the investigation - determination of interest on delayed refund as per Section 27 and 27A of the Customs Act 1962 - time limitation - principles of unjust enrichment - HELD THAT - It is settled position in law that interest on any amount deposited arises on two accounts either as contractual liability or as statutory liability (prescribed by the statute). Appellant has not shown anything by which it can be shown that the interest being claimed by them is in terms of any contract entered between them and the DRI or the Customs Department. The interest being claimed has arisen as a result of the provisions of statute. As per the appellants own submissions in the appeal filed by the appellant the amount claimed as refund has been deposited by them during the 2011. Even if the claim of the appellant is accepted that the amount deposited by them should be treated as deposit or as revenue deposit then alos the interest provisions as provided by Section 129EE of the Customs Act 1962 as it existed on the dated of deposit shall be applicable. It is settled principle in law that when the statute prescribes a manner of performance of an act then that is only method of performance all other methods are necessary barred. When the statute prescribed manner of computation of interest on the said deposits then that would be only available method and all other methods are necessary barred - Admittedly all the amounts claimed as refunds were deposited in the year 2011 much prior to 06.08.2014 and hence the interest could not have been granted in terms of this section from the date of deposit. It is also settled principle in law that tribunal being creature of statute cannot go beyond the provisions of the statute. Any order which has taken contrary view is beyond the jurisdiction vested in tribunal and hence should be treated as nullity. The case of Parle Agro 2021 (5) TMI 870 - CESTAT ALLAHABAD relied upon by the appellant was in respect of deposit made on 01.12.2005. Section 129EE was inserted in the Customs Act 1962 by Section 73 of the Finance Act 208 (Act 18 of 2008). Prior to insertion of this section there was no specific provision in respect of interest o n the deposits made and sought to be refunded as per the decisions of the appellate authority. Nearly all the decisions referred to by the appellant are in respect of the deposits made prior to this insertion hence are distinguishable. Reliance placed in the case of JINDAL PIPES LTD VERSUS COMMISSIONER CGST NOIDA 2024 (12) TMI 1448 - CESTAT ALLAHABAD where it was held that Interest would be paid from the date of deposit made. Conclusion - The interest on the refund is payable from the date of filing the refund application not from the date of deposit. There are no merits in the appeal - appeal dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

• Whether the appellant is entitled to a refund of the Anti-Dumping Duty (ADD) deposited during the investigation, and if so, from what date the interest on the refund should be calculated.
• The applicability of Section 27 and 27A of the Customs Act, 1962 in determining the interest on delayed refunds.
• The characterization of the amount deposited during the investigation as a "mere deposit" or as "duty" and the implications of such characterization on the refund and interest calculation.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Refund and Calculation of Interest

• Relevant Legal Framework and Precedents: The Customs Act, 1962, particularly Sections 27 and 27A, govern the refund and interest on delayed refunds. The appellant relied on various precedents, including decisions from the Supreme Court and High Courts, to argue for interest from the date of deposit.
• Court's Interpretation and Reasoning: The court emphasized that the amount deposited during the investigation was appropriated as duty by the original authority, thus acquiring the character of duty. The court referred to the Supreme Court's decision in Mafatlal Industries, which established that refunds must be processed under the statutory framework of the Customs Act.
• Key Evidence and Findings: The court noted that the appellant had deposited the amount during the investigation, which was later appropriated as duty. The appellant's claim for interest from the date of deposit was not supported by any contractual or statutory provision.
• Application of Law to Facts: The court applied the statutory provisions of Sections 27 and 27A, concluding that interest on delayed refunds is payable from the date of filing the refund application, not from the date of deposit.
• Treatment of Competing Arguments: The appellant's reliance on various precedents was distinguished by the court, noting that those cases involved deposits made prior to the insertion of specific statutory provisions governing interest on refunds.
• Conclusions: The court concluded that the appellant is not entitled to interest from the date of deposit but only from the date of filing the refund application, as per the statutory provisions.

3. SIGNIFICANT HOLDINGS

• Preserve Verbatim Quotes of Crucial Legal Reasoning: "The amount so appropriated acquired the character of duty, the moment it is appropriated against the demand made."
• Core Principles Established: The statutory framework under the Customs Act must be followed for refunds and interest on delayed refunds. The characterization of deposits as duty impacts the applicability of interest provisions.
• Final Determinations on Each Issue: The appeal was dismissed, affirming that the interest on the refund is payable from the date of filing the refund application, not from the date of deposit.

The judgment underscores the importance of adhering to statutory provisions for refunds and interest calculations, emphasizing that the characterization of amounts as duty or deposit significantly influences the outcome. The court's decision aligns with established legal principles and statutory mandates, providing clarity on the treatment of deposits during investigations and the subsequent refund process.