2018 (8) TMI 1352 - HC - Customs

Interest on delayed Refund of SAD - relevant date - N/N. 102/2007-Cus dated 14.09.2007 - Circular 6/2008-Cus dated 24.04.2008 - Held that - This Court in Micromax Informatics Limited 2018 (2) TMI 35 - DELHI HIGH COURT held that there was no period for refund of SAD, so could not be circumscribed by any period of limitation prescribed by mere executive instructions such as in the case of Circular. The period of limitation sought to be imposed upon refunds claimed and a restriction on the claim for interest, especially brought in by way of so called clarification by the CBEC Circular could not have override the law. The substantive law nowhere limits the claim for refund, which would otherwise ensure to the benefit of Assessee - petition allowed - decided in favor of petitioner.

Issues:
1. Claim for exemption from payment of Special Additional Duty (SAD) under Notification No.102/2007-Cus.
2. Rejection of refund claim by Deputy Commissioner of Customs.
3. Appeal before Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and subsequent refund order.
4. Claim for interest on the principal amount due to delay in refund.
5. Interpretation of Section 3(8) of the Customs Tariff Act 1975 and Section 27 of the Customs Act, 1962.
6. Applicability of limitation period on refund claims where SAD was levied.
7. Effect of Circular 6/2008-Cus on the claim for interest.
8. Judicial precedents in Principal Commissioner of Customs versus RISO India Private Limited and Micromax Informatics Limited.
9. Position adopted by the Revenue regarding the claim for interest.
10. Validity of the period of limitation on refund claims and restriction on interest claims as per CBEC Circular.
11. Decision on the writ petition and entitlement to interest on the refund amount.

Analysis:
1. The petitioner imported Set Top Boxes (STB) attracting Special Additional Duty (SAD) and claimed exemption under Notification No.102/2007-Cus. The refund claim was initially rejected by the Deputy Commissioner of Customs, but CESTAT allowed the claim, leading to a refund order of &8377;3,23,77,654/- in November 2017. The petitioner sought interest on the principal amount due to a delay of almost seven years in the refund process.

2. The Court interpreted Section 3(8) of the Customs Tariff Act 1975 and Section 27 of the Customs Act, 1962, concluding that the limitation period prescribed in the Notification could not be applied in cases where SAD was levied. This interpretation was supported by judicial precedents like Principal Commissioner of Customs versus RISO India Private Limited and Micromax Informatics Limited.

3. The Revenue argued that the petitioner's claim for interest was made freshly in April 2017, thus subject to the limitation period applicable to refund claims under Notification No. 102/2007-Cus. However, the Court, following Micromax Informatics Limited, held that there was no specific period for refund of SAD and rejected the Revenue's position.

4. The Court emphasized that the period of limitation and restrictions on interest claims imposed by CBEC Circular 6/2008-Cus could not override the substantive law benefiting the Assessee. It held that the petitioner was entitled to interest on the refund amount as per Section 27A of the Customs Act, quashing the impugned order and directing the respondents to pay interest within eight weeks.

5. In conclusion, the Court allowed the writ petition, following the reasoning in RISO and Micromax Informatics Limited, ensuring the petitioner's entitlement to interest for the delayed refund amount. The decision highlighted the importance of upholding substantive law over administrative circulars, ultimately benefiting the Assessee.

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