2023 (4) TMI 1031 - AT - Customs

Interest on delayed refund - the order of Ld. Commissioner (Appeals) has not been implemented at all till date and parties have not been refunded the principle amount of Rs. 1,00,423/- - HELD THAT - There are no merit in the appeal filed by the department and hence the same is rejected by upholding the impugned order. The refund sanctioning authority is further directed to finalize the refund claim of the assessee as directed by the Ld. Commissioner (Appeals) within a period of two months from the date of receipt of certified copy of this order.

Summary

Issues:
Refund of excess duty amount, application under Section 27 of the Customs Act, 1962, fulfillment of conditions for refund, rejection of refund claim, doctrine of unjust enrichment, interest on delayed refund, compliance with Section 27(2) of the Customs Act, 1962, violation of natural justice, discrimination in granting refunds, implementation of appellate order.

Analysis:
The appeal before the Appellate Tribunal CESTAT Chandigarh involved a dispute regarding the refund of an excess duty amount charged, originating from an application filed under Section 27 of the Customs Act, 1962. The Respondent/Assessee sought a refund of Rs. 1,00,423/- related to Additional Duty of Customs paid at the time of import under four bills of entry, including one for unclaimed cargo procured at a public auction. The refund claim was partially rejected based on non-fulfillment of conditions under Notification No. 102/2007-Cus. The adjudicating authority rejected the refund claim, leading to an appeal before the Ld. Commissioner (Appeals) who allowed the appeal in favor of the Respondent/Assessee.

Subsequently, the Respondent/Assessee applied for the refund of Rs. 1,00,423/-, which was again rejected by the adjudicating authority on the grounds of failure to prove non-passing of duty to the buyer, directing the amount to be credited to the Consumer Welfare Fund. The Ld. Commissioner (Appeals) overturned this decision, emphasizing that the doctrine of unjust enrichment did not apply in this case and directed the refund along with interest, leading to the department's appeal.

During the proceedings, the department argued against the grant of interest to the Respondent/Assessee, citing provisions of Section 27 and 27(a) of the Customs Act, 1962. The department highlighted previous decisions and emphasized that the refund was transferred to the Consumer Welfare Fund in compliance with Section 27(2) of the Act. The Respondent/Assessee's counsel supported the Ld. Commissioner (Appeals)' findings, referring to relevant case law and alleging a violation of natural justice and discrimination in granting refunds.

After considering the submissions and case records, the Appellate Tribunal upheld the Ld. Commissioner (Appeals)' decision, noting that the issue was thoroughly discussed, and the department's challenge was limited to the grant of interest. The Tribunal found no merit in the department's appeal, rejecting it and directing the refund sanctioning authority to finalize the refund claim within two months from the date of the order.

In conclusion, the judgment addressed various legal aspects, including the conditions for refund, the doctrine of unjust enrichment, interest on delayed refunds, compliance with statutory provisions, principles of natural justice, and consistency in granting refunds, ultimately upholding the decision in favor of the Respondent/Assessee and directing the timely processing of the refund claim.