2024 (3) TMI 997 - HC - Customs

Interest on Delayed Refund - Refund of additional duty was allowed in the remand proceedings - benefit of provisions of Section 27A of Customs Act - HELD THAT - There is substance in the contention as urged of behalf of the Petitioner as certainly Section 27A would provide for payment of interest on delayed payment of the refund amounts, which is the statutory entitlement of the Petitioner and which necessarily was required to be considered by the adjudicating officer in considering the Refund Applications on remand. It clearly appears that although a specific prayer was made before the Commissioner of Appeals and the proceedings were remanded in that regard, the Designated Officer has failed to consider such prayers. Even assuming the Petitioner had not made a prayer for interest, however, the fact remains that it would be a statutory entitlement of the Petitioner to seek the interest on the refund amounts when such applications were allowed. The Adjudicating Officer/Respondent be directed to decide the interest claim of the Petitioner on the Refund Applications, after granting to the Petitioner an opportunity of a hearing on the quantum. This be done within a period of four weeks from today and accordingly grant appropriate interest to the Petitioner in accordance with law. Let the Adjudicating Officer call the Petitioner for hearing by issuing seven days notice, so that all the documents whatever necessary can be presented before the Adjudicating Officer so as to enable him to pass appropriate order granting refund to the Petitioner - Petition disposed off.

Summary

Issues:
The issues involved in the judgment include refund claims for additional duty, rejection of refund claims by Adjudicating Authority, appeal to Commissioner of Appeals, remand of proceedings, failure to consider interest on refund, statutory entitlement under Section 27A of Customs Act, and direction to Adjudicating Officer to decide interest claim.

Refund Claims and Remand:
The Petitioner filed 7 refund claims for additional duty totaling Rs. 29,16,400 for the period from 2nd April, 2013 to 30th April, 2015. The Adjudicating Authority initially rejected the refund claims, leading the Petitioner to appeal to the Commissioner of Appeals. The Commissioner set aside the original orders and remanded the proceedings back to the Adjudicating Authority. Subsequently, the Adjudicating Officer allowed the refund applications, granting the amounts requested by the Petitioner, including interest.

Failure to Consider Interest:
Despite the refund claims being allowed, the Adjudicating Authority failed to pass any orders on interest, which is a statutory entitlement under Section 27A of the Customs Act. The Petitioner argued that the Adjudicating Officer did not consider the statutory entitlement to interest, even though it was raised before the Commissioner of Appeals and the proceedings were remanded specifically for this purpose.

Decision and Direction:
The Court acknowledged the statutory entitlement of the Petitioner to seek interest on the refund amounts. It directed the Adjudicating Officer to decide on the interest claim after providing the Petitioner with a hearing on the quantum of interest. The Adjudicating Officer was instructed to do so within four weeks and grant appropriate interest to the Petitioner in accordance with the law. The Petitioner was to be called for a hearing with a seven days notice to present all necessary documents for the decision on the refund.

Conclusion:
The judgment concluded by ordering the Adjudicating Officer to decide on the interest claim of the Petitioner within the specified timeline, ensuring that the Petitioner's statutory entitlement to interest on the refund amounts is duly considered and granted. All contentions in this regard were expressly kept open, and the Petition was disposed of with no costs incurred.