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TMI Blog2013 (7) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 27-A of the Customs Act with effect from 26.5.1995 or from the date of final order dated 28.8.2001 passed in the refund proceedings? and 2. Whether the Tribunal is right in computing the interest payable on the amount of duty to be refunded to the assessee after expiry of three months from the date of receipt of the final order passed in appeal arising out of refund proceeding and not from the date of order passed in the Assessment proceedings by the Commissioner of Customs (Appeals) dated 30.9.1992 whereby the assessment order was set aside and declared value was directed to be accepted and consequently the amount became refundable?" 2. The appellants herein are importers of mulberry raw silk. The appellants filed their Bill of Entry in respects of their imports along with the documents to show that the declared price was in terms of the transaction value. However, the said valuation was not accepted by the Authorities. With the result, the assessees paid the enhanced value under protest and the goods were cleared. Thereafter,the assessees preferred appeals before the Collector of Customs (Appeals). After taking into consideration the various materials placed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y order dated 12.8.1999 dismissed all the appeals . As against that, the assessees once again preferred appeals before the CEGAT. By order dated 28.8.2001, the CEGAT allowed the appeals in C/405 to 411 and 412 to 413 of 1999, thereby set aside the order of the Commissioner of Customs (Appeals). Following the decisions Mafatlal Industries Ltd. V. UOI (1997) 89 ELT 247 (SC); UOI V. Solar Pesticides (P) Ltd. (200 (116)ELT 401-SC and Addlsion & Co. V. CCE, Madras (2001) 129 ELT 44-Madras, the Tribunal held that the incidence of duty in all these cases had not been passed on to the actual customers and the same had been borne by the importer themselves. Thus, while allowing the appeals on refund, the Tribunal observed that the assessee was entitled to the consequential relief. Based on the order thus passed by the Tribunal, the assessees, once again, preferred petitions on 24.10.2001, claiming refund with interest at the rate of 15% from the date of deposit till the date of refund. 7. It is seen from the documents placed before this Court that the Deputy Commissioner of Customs passed an order on 12.3.2002 granting refund of duty payment alone without any interest. Aggrieved by this, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the appellants pointed out that in view of the Supreme Court decision confirming the Rajasthan High Court decision, the claim of the assessees for interest on the refund of the excess duty paid from the date of the order of the Collector of Customs (Appeals) at the first round of litigation allowing the assessees' appeals could not be, in any manner, be rejected. He pointed out that the provisions of Section 11B and 11BB of the Central Excise Act, are in pari materia to the provisions under Section 27 and 27A of the Customs Act; consequently, the decision of the Apex Court reported in (2011) 10 SCC 292 (Ranbaxy Laboratories Limited V. Union of India and others) would apply in fairness to the understanding of the provisions on payment of interest under the Customs Act. He further pointed out that after the order in the Writ Petitions allowing the assessees' case and remanding the matter back to the CEGAT, the claim of the assessees was accepted by the Tribunal, thereby the Revenue's appeals were dismissed. In which event, the order of the Collector of Customs allowing the assessees' appeals having attained finality, in all fairness to the claim of the assessees, refund should hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one year or six months, as the case may be, shall be computed from the date of such judgment, decree, order or direction. Section 27 (2) If, on receipt of any such application, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied that the whole or any part of the duty and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund. SECTION 27A. Interest on delayed refunds If any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five percent and not exceeding thirty percent per annum as is for the time being fixed by the Central Government by Notification in the Official Gazette, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty : Provided that where any duty, ordered to be refunded under sub-section (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be worked out as per the fourth proviso to Section 27 of the Customs Act. In this case, going by the admitted fact that the order of the Collector of Customs (Appeals) was finally disposed of on 17.03.1999, the claim can properly be said to arise only consequent on the order of the Appellate Authority, namely, CEGAT dismissing the Revenue's appeal and not the Collector of Customs (Appeals). Thus, till such time the Tribunal disposed of the appeal on merits, the assessees could not lay their claim for refund, solely on the basis of the order of the Collector of Customs (Appeals). 13. As already noted in the preceding paragraph, on the Writ Petitions filed before this Court, the first order of the Tribunal dated 01.08.1997 was set aside by this Court and the matter was restored to the CEGAT for de novo consideration and only thereafter, in the year 1999, the Tribunal accepted the case of the assessees on valuation and allowed the assessees' appeals. Thus, in stricto senso, the claim for refund would arise only from 1999 and not before. It is no doubt true that the assessees made applications for refund consequent on their appeals being allowed by the Collector of Customs (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty, needs to be seen. A reading of the said provision shows that any person claiming refund of excess duty and interest paid on such duty has to make an application for refund before the expiry of one year from the relevant date. The relevant date is defined under Clause (B) to Explanation to Section 11B of the Central Excise Act. 16. Learned Senior counsel appearing for the appellants seeks to draw inspiration from the definition of 'relevant date', particularly sub-clause (f) to Clause (B) for the purpose of claiming interest herein. The said provision has no relevance for the purpose of understanding Section 27 of the Customs Act, which stands differently worded. Thus, considering the provision under Section 11B of the Central Excise Act, the reliance placed on the decision of the Supreme Court reported in (2011) 10 SCC 292 (Ranbaxy Laboratories Limited V. Union of India and others) as well as on the decision of the Rajasthan High Court reported in 2004 (170) ELT 4 (Raj) (J.K.Cement Works V. Asstt. Commissioner of Central Excise and Customs) merits to be seen. 17. The decision reported in (2011) 10 SCC 292 (Ranbaxy Laboratories Limited V. Union of India and others) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the Commissioner (Appeals) or Tribunal as that of the original Authority under Section 27(2) has relevance for the purpose of grant of interest under Section 27A of the Customs Act. Therefore, the liability of the Revenue to pay interest would arise immediately after the expiry of three months from the date of receipt of the application till the date of refund of such amount. 19. As far as the present case is concerned, when the claim of the assessees could validly be made only on the disposal of the appeals by the Tribunal, we have no hesitation in holding that the assessees would be entitled to interest only after the period of expiry of three months from the date of the application till the date of refund of such duty. 20. As far as the claim of the assessee based on the decision of the Rajasthan High Court reported in 2004 (170) ELT 4 (Raj) (J.K.Cement Works V. Asstt. Commissioner of Central Excise and Customs) is concerned, we do not find that the decision would be of any assistance considering the difference in language between the Central Excise Act (Section 11B) and the Customs Act (Section 27). Learned Senior counsel appearing for the appellants placed he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated therein from the relevant date. Taking note of the definition 'relevant date' under Explanation B(f), the High Court held that the date of payment of duty and not the date of determination about excess payment of duty would be the criteria for making an application under Section 11B(1). The Rajasthan High Court held: "36. However, the payment of interest was linked not to the order under Section 11B, but with the application required to be made under Section 11B (1). As discussed above every person who claims a refund is first required to make an application under Section 11B before time limit stated therein from the relevant date. The relevant date defined under Explanation B(f), applicable to present case, is the date of payment of Duty and not the date of determination about excess payment of Duty. Until substituted vide Finance Act, 2000, any claimant, to refund was required to make an application before expiry of six months from the relevant date, which in the case of the petitioners, who did not fall within Clause (a)(e) of Explanation B to Section 11B was the date of payment of Duty. The period for making such applications since Finance Act, 2000 has been enhanced to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Senior counsel appearing for the appellants, the refund claim could lawfully be granted only after the dismissal of the appeal by the Tribunal and not for the period prior to that date, i.e., from the date when the Collector of Customs (Appeals) passed an order in favour of the assessees. In otherwords, the assessees could validly lay their claim, rightly so in this case, only after the dismissal of the appeal by the Tribunal and not prior to that date. Therefore, we do not agree with the contention of the learned Senior counsel appearing for the appellants that the appellants are entitled to claim interest prior to that date, i.e,. they would be entitled to claim interest from the time when the Collector of Customs (Appeals) had allowed the appeals. Consequently, rejecting the above appeals, we hold that going by the provisions available under Section 27 and 27A of the Customs Act, the claim of the assessees for interest arise only on the dismissal of the appeals before the Tribunal, wherein the order of the Collector of Customs (Appeals) got confirmed and if the claim of the assessees for refund is not disposed of within the time specified under Section 27 of the Customs Act, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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