2017 (10) TMI 859 - AT - Customs

Entitlement of interest - delayed Refund of SAD - N/N. 102/2007-Cus. - section 27A - Held that - the issue is squarely covered by the decision in the case of Principal Commissioner of Custom Versus Riso India Pvt. Ltd. 2015 (10) TMI 1099 - DELHI HIGH COURT , where it was held that Department was not justified in denying interest to Respondent on the delayed refund of SAD by resorting the para 4.3 of the CBEC s Circular No.6/2008 - interest granted - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund of Special Additional Duty (SAD) paid by respondents.
2. Grant of interest on belated refunds.
3. Challenge by Revenue regarding interest payment.
4. Grounds raised by Revenue in the appeal.

Analysis:
1. The issue in this case pertains to the refund of Special Additional Duty (SAD) paid by the respondents at the time of imports, as per Notification No.102/2007-Cus., which allows such refund on subsequent sale of goods on payment of VAT/Sales Tax. The original adjudicating authority disallowed the refund on grounds of limitation, stating it was filed after one year from the payment of SAD. However, the Commissioner (Appeals) ruled in favor of the respondents, citing the start of the limitation period from the date of subsequent sale of goods, not the SAD payment date. This decision aligned with the Hon'ble Delhi High Court's ruling in a similar case, leading to the Commissioner's decision in favor of the respondents.

2. The Commissioner (Appeals) further noted that if the SAD refund was not processed within three months of filing, the respondents were entitled to interest. Citing the Hon'ble Delhi High Court's decision in another case and the Hon'ble Supreme Court's ruling, the Commissioner directed the lower authority to grant interest for the delayed refund. The Revenue challenged this decision, arguing that the jurisdictional High Court's stay order against a related case made the Commissioner's decision on interest non-implementable. However, the Tribunal found no merit in this argument and upheld the Commissioner's decision on granting interest for belated refunds.

3. The Revenue's appeal primarily focused on the grant of interest on belated refunds, with no specific challenge to the limitation of the SAD refund. The Tribunal clarified that since the Revenue's prayer was to set aside the Order-in-Appeal based on interest grounds, it indicated the Revenue's grievance was solely related to the interest directive. Despite the Revenue's contention regarding the stay order from the Divisional Bench, the Tribunal found that the High Court had independently examined the issue and ruled in favor of interest payment on belated refunds. As there was no contradictory decision from any other High Court, the Tribunal concluded that the Revenue's appeal lacked merit and rejected it.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision regarding the grant of interest on belated refunds and dismissed the Revenue's appeal, finding it lacking in merit based on the legal interpretations and precedents cited during the case proceedings.