2013 (9) TMI 545 - AT - Customs

Refund claim Interest on delayed refund - Assesse had filed refund claim arising out of finalization of provisional assessment of Bills of Entry the contention of the revenue that amount to be credited to the Consumer Welfare Fund on the ground of unjust enrichment Held that - There was a delay of more than three months in payment of refund to the assesse and department was liable to pay interest on such delayed payment of refund from the first day subsequent to three months of the finalizing of assessment - u/s 18(4) any refund amount due was not paid to the assesse within three months from the date of final assessment of Bill of Entry interest was liable to be paid. The date i.e. 24-1-2008 to 7-3-2008 becomes sacrosanct for determining the question of the applicability of interest on the amount of excess duty paid by the assesse - In view of legal position the assesse was entitled for refund of interest amount albeit after working out exact amount of interest liability by the adjudicating authority on the basis of evidence made available to him relying upon AREVA T&D India Limited Versus Commissioner of Customs Chennai Airport and Air Cargo Complex/Assistant Commissioner of Customs (Refunds -Air) 2012 (10) TMI 919 - MADRAS HIGH COURT . Unjust enrichment - The question of unjust enrichment also does not arise as there was an order of provisional assessment and findings were there being no unjust enrichment the order was correct, legal and does not suffer from any infirmity Decided against revenue.

Summary

Issues:
- Stay petition and appeal against OIA No. 42/2012/CUS/COMMR(A)/AHD
- Refund claim of Rs. 3,45,68,432/- credited to Consumer Welfare Fund
- Appeal before Commissioner of Customs (A) and subsequent orders
- Appeal before CESTAT, Ahmedabad and rejection
- Appeal before High Court of Gujarat pending disposal
- Refund sanctioned but interest on delayed payment rejected
- Department's submission on interest liability and unjust enrichment
- Respondent's submission citing legal precedents
- Entitlement for interest on delayed payment of excess customs duty
- Findings of the First Appellate Authority and legal analysis

Detailed Analysis:
1. The case involved a stay petition and appeal against OIA No. 42/2012/CUS/COMMR(A)/AHD. The appellant, the Revenue, filed an appeal against the order of the Assistant Commissioner (Customs) Surat crediting a refund claim of Rs. 3,45,68,432/- to the Consumer Welfare Fund based on unjust enrichment concerns.

2. The Respondent appealed before the Commissioner of Customs (A) who set aside the order and directed the refund to the Respondent. The Revenue then appealed to CESTAT, Ahmedabad, which rejected the appeal. Subsequently, the department filed an appeal before the High Court of Gujarat, which is pending disposal.

3. The Respondent sought interest on delayed payment of the refunded amount, which was rejected by the Revenue authorities. The First Appellate Authority accepted the plea for interest, citing entitlement under Section 18 of the Customs Act, 1962. The Revenue contended that interest liability arises only after finalization of provisional assessments.

4. The Respondent argued that the provisional assessment falls under Section 18 of the Customs Act, 1962, and cited legal precedents to support their claim for interest on delayed payment beyond the prescribed three months period.

5. The First Appellate Authority's findings aligned with the legal position under Section 18(4) of the Customs Act, mandating interest payment if the refundable amount is not paid within three months from the final assessment. The Authority emphasized that the date of filing the refund claim was not relevant for determining interest liability.

6. The Tribunal concurred with the First Appellate Authority's analysis, noting that the case did not involve unjust enrichment due to the provisional assessment order. Citing the legal precedent from the Madras High Court, the Tribunal upheld the entitlement of the Respondent for interest on delayed payment of excess customs duty.

7. Ultimately, the Tribunal rejected the Revenue's appeal, affirming the correctness and legality of the First Appellate Authority's decision. The judgment highlighted the applicability of interest under Section 18(4) and dismissed the Revenue's contentions regarding interest liability and unjust enrichment.