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2017 (8) TMI 11 - AT - CustomsEntitlement of interest - delayed refund - Circular No. 6/2008-Cus dated 28.04.2008 - Held that - reliance placed upon the decision of Hon ble Madras High Court in the case of KSJ Metal Impex (P) Limited vs. Under Secretary (Cus.), M.F. (DR) 2013 (6) TMI 148 - MADRAS HIGH COURT to say that the said Circular has been considered by the Hon ble High Court and the Hon ble High Court quashed Para 4.3 of the said Circular relied upon by the ld. AR and held that the assessee is entitled for interest on belated refunds - appellants are entitled to claim interest of delayed refund, after three months from the date of filing of the refund claims - appeal allowed - decided in favor of appellant.
Issues:
1. Entitlement to interest on delayed refund under Notification No.102/2007-Cus dated 14.09.2007. Analysis: The appellant appealed against the orders granting the refund claim under Notification No.102/2007-Cus but not paying interest on the delayed refund. The Revenue argued that as per Circular No.6/2008-Cus, no interest is payable on such claims. However, the appellant cited a decision of the Hon'ble Madras High Court in KSJ Metal Impex case, where it was held that interest on belated refunds is justified. The Circular mentioned by the Revenue was challenged in the court, emphasizing that interest provisions under the Customs Act should be followed for refund claims. The Circular dated 28.04.2008 stated that no interest is payable under Notification No.102/2007-Cus, as there was no specific provision for it. However, the Madras High Court in the KSJ Metal Impex case highlighted that the grant of exemption under the Customs Act and the conditions for seeking a refund should be considered under Section 27 of the Customs Act, which includes provisions for interest on delayed refunds. The court ruled that denying interest on delayed refunds contradicts the statutory provisions and struck down the Circular as inappropriate. The judgment concluded that appellants are entitled to claim interest on delayed refunds after three months from filing the refund claims, aligning with the provisions of Sections 27 and 27A of the Customs Act. The appeals were allowed with consequential relief, emphasizing the importance of following statutory provisions for refund claims and interest on delayed refunds as per the Customs Act.
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