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2021 (12) TMI 1190 - AT - CustomsDelayed refund - Levy of Interest - interest on excess amount of customs duty deposited under protest at the time of passing of the Bill of Entry on provisional basis till the date of refund of the excess amount deposited - HELD THAT - A wrong section has been considered by the Commissioner (Appeals) in the impugned order. The amount deposited provisionally is an amount deposited under protest and partakes the character of pre-deposit from the date of such deposit as the matter was sub-judice. Further Section 129 EE of the Customs Act read with ruling of Hon ble Supreme Court in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS 2006 (1) TMI 55 - SUPREME COURT provides for grant of interest on the amount of pre-deposit from the date of deposit till the date of grant of refund. The appellant is entitled to interest from the date of deposit of duty till the date of grant of refund @ 6% P.A. (at the prescribed rate) - Appeal allowed - decided in favor of appellant.
Issues:
- Entitlement to interest on excess customs duty deposited under protest Analysis: The dispute in this appeal revolves around the entitlement of the appellant to interest on the excess amount of customs duty deposited under protest until the refund of the excess amount. The appellant imported old and used printing machines and declared an assessable value of &8377; 15,36,600. However, the Revenue disagreed with this value and determined the assessable value to be &8377; 50,75,000. The appellant paid the duty on the enhanced value to release the goods. The appellant later appealed this decision, and the CESTAT, New Delhi set aside the order-in-original, holding it to be without merit. Subsequently, the appellant filed a refund claim for the excess duty paid, which was initially rejected on the grounds of unjust enrichment. However, the Tribunal later ruled that there was no unjust enrichment in this case and allowed the appeal of the appellant. Following this, the appellant filed a refund claim for the excess duty paid, which was initially rejected on the grounds of unjust enrichment. However, the Tribunal later ruled that there was no unjust enrichment in this case and allowed the appeal of the appellant. Despite the refund being granted, the interest on the excess amount was denied by the authorities, citing the provisions of Section 27A of the Customs Act, 1962, which allows interest on refunds not granted within three months from the date of application. The Commissioner (Appeals) observed that the appellant was entitled to interest three months after the date of filing the refund claim. Upon considering the contentions, the Member (Judicial) found an error in the section considered by the Commissioner (Appeals) and referred to Section 129 EE of the Customs Act, along with the ruling of the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. The Member held that the amount deposited provisionally under protest should attract interest from the date of deposit until the grant of refund. Consequently, the Member allowed the appeal and held that the appellant is entitled to interest at the prescribed rate of 6% per annum, directing the disbursement of such interest within 45 days from the date of the order.
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