2017 (2) TMI 183 - AT - Customs

Interest on delayed refund of redemption fine - Section 27 Customs Act, 1962 - Held that - there is only one provision for refund of duty which is incorporated in Section 27 of the said Act - the ld. Assistant Commissioner has allowed the refund of ₹ 10,00,000/-, which was appropriated as Redemption Fine through his order dated 23/12/2003. We understand that such order was issued under the powers vested under ld. Deputy Commissioner under Section 27 of Customs Act, 1962. That being so the argument of the Revenue that provisions of Section 27A of Customs Act, 1962 are not applicable for delayed refund of Redemption Fine is contradictory to the order already passed by the ld. Deputy Commissioner, which was not challenged by Revenue - appeal dismissed - decided against Revenue.

Summary

Issues:
Challenge to Order-in-Appeal allowing interest on delayed payment of refund; Applicability of Section 27A of Customs Act, 1962 to Redemption Fine.

Analysis:
The appeal was filed by Revenue challenging the Order-in-Appeal allowing interest on delayed payment of refund. The case involved a seizure of Gandha Oil valued at ?22,75,000 at the Foreign Post Office in an export consignment. The respondent-assessee made a pre-deposit of ?10,00,000 towards Redemption Fine during the proceedings. The matter went through multiple adjudications and appeals, resulting in a refund request of the appropriated Redemption Fine. The Deputy Commissioner allowed the refund, leading to an appeal for interest on the refund, which was granted by the Commissioner (Appeals) in the Order-in-Appeal dated 19/01/2006. The Revenue's ground of appeal was that Redemption Fine cannot be considered as duty, hence Section 27A of the Customs Act, 1962, should not apply to the refund.

The Revenue's argument was that Redemption Fine should not be subject to Section 27A of the Customs Act, 1962, as it is not considered duty. However, the Tribunal found that the order allowing the refund was issued under the powers vested in the Deputy Commissioner under Section 27 of the Customs Act, 1962. The Tribunal noted that the Revenue did not challenge the Deputy Commissioner's order, which contradicted their argument against the applicability of Section 27A. Therefore, the Tribunal dismissed the appeals filed by the Revenue, affirming the applicability of Section 27 for the refund of the Redemption Fine. The Tribunal also disposed of the Cross Objection filed by the respondent.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) to allow interest on the delayed refund of the Redemption Fine. The judgment clarified the application of Section 27 of the Customs Act, 1962, in the case, emphasizing the authority of the Deputy Commissioner in issuing the refund order. The Tribunal's ruling highlighted the importance of consistency in challenging orders and the relevance of statutory provisions in determining refund eligibility.