2016 (12) TMI 1208 - AT - Customs

Whether the appellant is entitled for interest on delayed sanction of refund of SAD under N/N. 102/07-Cus DATED 14/9/2007? - Held that - the very same issue has been considered by the Hon ble High Court of Madras in the case of Ksj Metal Impex (P) Ltd 2013 (6) TMI 148 - MADRAS HIGH COURT where it was held that the appeallant is entitled for the refund of interest on delayed sanction of refund under Notification No. 102/07-Cus. As regard the Circular No. 06/2008 relied upon, Hon ble High court has held the said circular as ultra virus - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues involved:
Whether the appellant is entitled to interest on delayed sanction of refund under Notification No. 102/07-Cus dated 14/9/2007.

Analysis:
The appeal was filed against an order upholding the rejection of the appellant's appeal for refund. The primary issue was whether the appellant is entitled to interest on delayed refund under Notification No. 102/07-Cus. The Commissioner(Appeals) denied interest based on a Board Circular stating that interest does not arise for such claims. The appellant argued that all refunds under the Customs Act are governed by Section 27, entitling them to interest. They cited judgments from the Madras and Delhi High Courts supporting their claim for interest on delayed refunds.

The Revenue, represented by the Assistant Commissioner, contended that special additional duty under Section 3A of the Customs Act does not fall under the refund provisions of Section 27. They relied on various judgments to support their position that interest provisions under Section 27 do not apply to refunds under Notification No. 102/07-Cus. The Tribunal considered the arguments presented by both sides.

The Tribunal noted that similar issues were addressed by the High Courts of Madras and Delhi. The Delhi High Court's judgment in a customs appeal case established that Sections 27 and 27A of the Act apply to refunds and interest on delayed refunds, including those under Notification No. 102/07-Cus. The Court found the denial of interest by the Revenue to be inconsistent with the Act, dismissing the appeal and ordering interest on the refunded amount. The Tribunal, following the settled legal position and Delhi High Court's judgment, ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief.

In conclusion, the judgment clarified that the appellant is entitled to interest on delayed refund under Notification No. 102/07-Cus, aligning with the Delhi High Court's decision and rejecting the Revenue's arguments against granting interest based on previous judgments.