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2019 (11) TMI 543 - HC - CustomsInterest on the delayed refund of Anti Dumping Duty - Relevant time for calculation of interest - calculation of interest from the date of expiry of three months from the making of the applications for refund - HELD THAT - The Petitioner is entitled to grant of interest in terms of Section 27A of the Customs Act, 1962 i.e. from the expiry of three months, on amount of ₹ 39,46,441/- from the date of the application for refund of the said amount i.e. 18.01.2013 onwards, till the amount was refunded on 27.02.2018. Similarly, the Petitioner is entitled to interest on the amount of ₹ 24,61,739/- from 27.02.2013 onwards till the date of refund i.e. 27.02.2018. After the review, the DA recommended levy of ADD, and the Central Government accepted the recommendations and levied ADD vide notification No. 15/2013-Cus (ADD), dated 03.07.2013. It is to be noted that the Notification No. 15/2013 Cus does not anywhere state that it has retrospective effect, therefore the aforesaid notification No. 15/2013 Cus only has prospective effect with effect from 03.07.2013. Thus during the relevant period in the present case, the ADD was not chargeable. The delay in release of the refund claim of the petitioner was not justified and it could not be said that the refund application was made pre-maturely - the Respondents are directed to pay the interest on the aforesaid amounts in terms of Section 27A of the Customs Act within the period of 8 weeks from the date of receipt of the copy of this order - petition disposed off.
Issues Involved:
1. Entitlement to interest on delayed refund of Anti Dumping Duty (ADD). 2. Validity of the rejection of the interest claim by the Respondents. 3. Interpretation and applicability of Section 27A of the Customs Act, 1962. 4. Impact of the CESTAT’s decision on the refund process. 5. Relevance of the Supreme Court’s rulings in similar cases. Issue-wise Detailed Analysis: 1. Entitlement to interest on delayed refund of Anti Dumping Duty (ADD): The Petitioner sought directions for the Respondents to pay interest on the delayed refund of ADD from the date of expiry of three months from the applications for refund, which were made on 18.01.2013 and 27.02.2013 for ?39,46,441/- and ?24,61,739/- respectively. The Petitioner argued that the refund should have been processed within three months as mandated by Section 27A of the Customs Act, 1962. 2. Validity of the rejection of the interest claim by the Respondents: The Respondents rejected the Petitioner’s application for interest on the grounds that the refund claim was premature and that the complete documents were submitted only during the personal hearing on 15.12.2017. The Respondents cited the Supreme Court decision in Priya Blue Industries Ltd. v. Commr. of Customs (Preventive), (2005) 10 SCC 433, arguing that the refund claim could not precede the finalization of re-assessment. 3. Interpretation and applicability of Section 27A of the Customs Act, 1962: Section 27A mandates that interest is payable if the refund is not made within three months from the date of receipt of the application. The Petitioner relied on the Supreme Court’s decision in Ranbaxy Laboratories Ltd. v. Union of India, (2011) 10 SCC 292, which clarified that interest on delayed refunds should be calculated from the date of the refund application, not from the date of finalization of re-assessment. 4. Impact of the CESTAT’s decision on the refund process: The CESTAT had quashed the notification No. 70/2010-Cus, which mandated the payment of ADD, and this decision was final. Consequently, the Petitioner’s claim for a refund was valid, and the Respondents had no grounds to delay the processing of the refund application. The court noted that the Respondents' internal procedures could not override the statutory right to interest on delayed refunds. 5. Relevance of the Supreme Court’s rulings in similar cases: The court referenced the Supreme Court’s decisions in Ranbaxy Laboratories Ltd. and Union of India v. Hamdard (Waqf) Laboratories (2016) 6 SCC 621, which underscored the obligation of the revenue authorities to process refund claims within the stipulated period and pay interest on delays. The court found that the Respondents' reliance on procedural delays was unfounded and contrary to established legal principles. Conclusion: The court concluded that the Petitioner was entitled to interest on the delayed refund of ADD as per Section 27A of the Customs Act, 1962. It directed the Respondents to pay interest from the expiry of three months from the dates of the refund applications (18.01.2013 and 27.02.2013) till the date of actual refund (27.02.2018). The order dated 14.06.2018, which rejected the Petitioner’s claim for interest, was quashed. The Respondents were instructed to pay the interest within eight weeks from the receipt of the court’s order. The petition was disposed of with these directions.
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