2019 (8) TMI 692 - AT - Customs

Interest on delayed refund of SAD - N/N. 102/2007-Cus. dated 14.9.2007 - HELD THAT - It is very much clear that the original authority who has sanctioned the refund vide Order-in-Original No.260/2018 dated 29.5.2018 has observed that the refund claim has been filed on 29.3.2016. Thus the refund claim was submitted within the time and before the correct jurisdiction during the relevant time. The refund, however, has been sanctioned only on 29.5.2018. Thus, obviously, there is a delay in sanctioning the refund. The appellant has also repeatedly issuing communication to the department requesting for processing the refund expeditiously. The appellants are eligible for interest on the delayed payment of refund in terms of Section 27A of the Customs Act, 1962. Thus, the refund sanctioning authority is directed to grant interest to the appellant from three months of the date of filing of refund claim i.e. on 29.3.2016 till the payment of the refund - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Delayed processing of refund claim.
2. Eligibility for interest on delayed refund payment.

Issue 1: Delayed processing of refund claim
The appellants filed a refund claim for the refund of 4% SAD as per Notification No. 102/2007-Cus. dated 14.9.2007. Despite the appellant's efforts and reminders, the refund claim was not processed in a timely manner. The Order-in-Original dated 14.10.2016 rejected the refund claim citing the lack of essential documents. The matter was remanded by the Commissioner (Appeals) to the original authority for processing the refund claim and considering the interest request. The refund claim was transferred to the Air Cargo Commissionerate, and the refund was finally sanctioned on 29.5.2018 without granting any interest. The Commissioner (Appeals) remanded the matter again for consideration of interest on the delayed refund. The appellant argued for interest under Section 27A of the Customs Act, 1962, due to the delay in sanctioning the refund.

Issue 2: Eligibility for interest on delayed refund payment
The main contention revolved around the appellant's request for interest on the delayed payment of the refund. The refund sanctioning authority acknowledged that the refund claim was filed on 29.3.2016, but the refund was only sanctioned on 29.5.2018, indicating a significant delay. The appellant consistently communicated with the department to expedite the refund processing. Considering the delay and the appellant's eligibility for interest under Section 27A of the Customs Act, 1962, the Tribunal found in favor of the appellant. The Tribunal directed the refund sanctioning authority to grant interest to the appellant from the date of filing the refund claim until the payment of the refund. The authority was instructed to process the interest payment within three months from the date of the Tribunal's order.

In conclusion, the Tribunal modified the impugned order to include the grant of interest on the delayed payment of the refund. The appeal was allowed with consequential relief, if any, ensuring that the appellants receive the appropriate interest for the delayed refund payment as per the provisions of the Customs Act, 1962.