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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 ..... e amount became refundable – Held that:- liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made - following the judgement of Ranbaxy Laboratories Limited V. Union of India and others(2011 (10) TMI 16 - Supreme Court of India) – decided against the assessee. - Civil Miscellaneous Appeal Nos.576 to 580 of 2012 - - - Dated:- 18-7-2013 - Chitra Venkataraman And K. B. K. Vasuki,JJ. For the Appellants : Mr. J. Raja Kalifulla, S. C. for M/s. V. Pushpa For the Respondents : Mr. K. Mohanamurali, SCGSC JUDGMENT (Judgment of the Court was delivered by Chitra Venkataraman,J.) These batch of appeals, preferred at the instance of the assessees, arise out of the order of the Customs, Excise and Gold (Control) Appellate Tribunal. This Court, by order dated 30.3.2012 admitted these Civil Miscellaneous Appeals, on the following substantial questions of law: "1. Whether the respondents are liable to pay interest on delayed refund of duty erron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the assessees' claim, thereby rejected the appeals filed by the Revenue. With the result, the order passed by the Collector (Appeals) dated 30.09.1992 was confirmed accepting the value declared by the assessees on the imports made. 5. It is a matter of record that in the meantime, the assessees made applications to Assistant Collector (Customs) on 12.3.1993 claiming refund of the excess duty of Rs.7,59,786/- and Rs.1,95,138/- with interest at 20% per annum from the date of deposit. The assessees again approached this Court for disposal of that applications in W.P.Nos.7349 and 7950 of 1993 and W.P.Nos.13536 and 13539 of 1994 for a direction to the Assistant Collector (Customs) for refund of the excess duty amount. The claim of the assessees, was, however, rejected by the Assistant Collector (Customs) on 16.12.1994 and directed the amount to be taken to the Convener Welfare Fund. As against this, the assessees went on appeal before the Commissioner (Appeals) in C3/17 to 25/95. By order dated 6.6.1995, the Commissioner (Appeals) partially refunded a sum of Rs.4,30,388/- out of Rs.7,59,785/- in respect of M/s.Shakun Overseas Ltd. and refunded the entire amount of Rs.1,95,139/- in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the date of deposit till the date of refund. 8. By order dated 11.12.2006, the CESTAT disposed of the applications directing the Revenue to pay interest on the duty amount from 22.1.2002 to 12.3.2002. The Tribunal pointed out that though the applications made did not specifically sought for a direction to the lower Authorities for payment of interest, yet, in terms of the decision of the Tribunal's Larger Bench reported in 2004 (164) ELT 156 (Tri.LB) (Indian Thermoplastics (P) Ltd. V. Commissioner of Customs, Kolkata), wherein the relevant date for computation of interest on the duty refunded to the assessee was held to be the date immediately after expiry of three months from the date of receipt of the relevant final order of the Tribunal, the payment of interest could be only from 22.1.2002 to 12.2002 and not prior to that period. Aggrieved by this, the assessees have come before this Court by preferring the above appeals. 9. Learned senior counsel appearing for the appellants placed strong reliance on the decision reported in (2011) 10 SCC 292 (Ranbaxy Laboratories Limited V. Union of India and others) as well as on the decision reported in 2004 (170) ELT 4 (Raj) (J.K.Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t deal with claim for refund of duty and interest on the belated refunds respectively. A reading of Section 27 of the Customs Act shows that any person claiming refund of any duty paid pursuant to an order of assessment or otherwise has to make an application for refund of such duty within a period of six months or one year, as the case may be, as provided for under Section 27 of the Customs Act. Section 27(2) states that on receipt of the application, when the Assistant Commissioner/Deputy Commissioner, as the case may be, is satisfied that the duty paid by the assessee (duty + interest), if any, is refundable, he may make an order accordingly. Section 27A of the Customs Act, in fact, provides for time limit within which the application be disposed of, failing which the assessee would be entitled to claim interest. The relevant portion of Section 27 as well as Section 27 A read as under: "SECTION 27. Claim for refund of duty. (1) Any person claiming refund of any duty and interest, if any, paid on such duty - (i) paid by him in pursuance of an order of assessment; or (ii) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Section 27(2) of the Customs Act shows that where an order of refund is made by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or any Court against the order of the Assistant Commissioner of Customs or Deputy Commissioner under Section 27(2) of the Customs Act, the order of refund passed by the Commissioner (Appeals) or Appellate Tribunal shall be deemed to be an order passed under Section 27(2) of the Customs Act by the Assistant Commissioner/Deputy Commissioner of Customs for the purposes of grant of interest under Section 27A of the Customs Act. The fourth proviso to Section 27 of the Customs Act states that where the duty becomes refundable as a consequence of judgment, decree, order or direction of the appellate authority, Appellate Tribunal, or any Court, the limitation of one year or six months, as the case may be, shall be computed from the date of such judgment, decree, order or direction. Thus, while Section 27 of the Customs Act speaks about the limitation for preferring refund claim consequent on the order passed by the Appellate Authority on the quantum appeal, Section 27A is about the refund order passed by the Appellate Authority on appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government by notification on the official gazette 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. It is a matter of relevance that on the dismissal of the assessees' claim by the Tribunal dated 01.08.1997, wherein the Tribunal allowed the Revenue's appeal in the first round of litigation, the claim by the assessee could not be said to be alive for all practical purposes. It is only after the order of the Tribunal dated 17.03.1999 dismissing the Revenue's appeal that the right of the assessees to claim refund could surface. 14. Going by the clear provisions available under Section 27A of the Customs Act, we hold that the assessees would be entitled to interest on the expiry of three months from the date of receipt of the application to the date of refund of such duty and on no account they would be entitled to interest on the amount paid under protest from the date of payment, as had been claimed by them. We also make it clear that the refund claim could be validly held to be made only on the disposal of the appeals by the Tribunal and not any date prior to that, which means, the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is made by an appellate authority or the Court, then for the purpose of Section 11B, the order made by such higher appellate authority or by the court shall be deemed to be an order made under Section 11B(2) of the Central Excise Act. Thus, interest under Section 11BB was payable on the expiry of the period of three months from the date of receipt of the application for refund on the amount claimed thus remaining unpaid. The Apex Court pointed out " Thus, the only interpretation of Section 11-BB that can be arrived at is that interest under the said section becomes payable on the expiry of a period of three months from the date of receipt of the application under sub-section (1) of Section 11-B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11-BB of the Act becomes payable." 18. Thus, the Apex Court held that the liability of the Revenue to pay interest under Section 11BB of the Central Excise Act commenced from the date of expiry of three months from the date of receipt of the application for refund under Section 11B(1) and not on the expiry of the said period from the date on which the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Commissioner (Appeals) was taken on appeal by the Revenue before the CEGAT, which upheld the claim of the assessee as a new industrial undertaking. In spite of the order dated 15.03.1996, accepted by the Revenue, there was no refund made. Instead, a show cause notice was issued to transfer the amount to the Consumer Welfare Fund. The direction to deposit the duty paid by the assessee to be transferred to the Consumer Welfare Fund was subjected to appeal before the Commissioner (Appeals) and thereafter before the Tribunal, which upheld the claim of the assessee for refund. Except for the principal amount, no interest was paid by the Revenue. This was challenged before the High Court by way of writ petitions. Pointing out that the assessee was entitled to refund pursuant to the order of the Tribunal, the Rajasthan High Court considered the claim of the assessee for refund prior to the expiry of three months from the date of the order dated 15.12.2002. In considering this, the Rajasthan High Court pointed out that reading Section 11BB with Section 11B of the Central Excise Act, the payment of interest could only be treated as one linked to the application required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the rate notified by the Board from time to time, with effect from the date of expiry of three months from the date of application until date of payment of arrears of amount of excess Duty to Consumer Welfare Fund." Thus, the Rajasthan High Court allowed the petition directing the Revenue to pay interest under Section 11B of the Central Excise Act with effect from the expiry of three months from the date when 11BB of the Central Excise Act came into force, i.e., 26.5.1995 until the date of actual payment. 23. This judgment was affirmed by the Apex Court in the decision given dismissing the Special Leave to Appeal (Civil) No.2131 of 2008 dated 06.08.2009 in the appeal filed by the Revenue against the judgment of the Allahabad High Court reported in 2008 (229) ELT 205 (U.P. Twiga Fiber Glass Ltd. Vs. U.O.I.). 24. A reading of 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), as confirmed by the Apex Court, has to be seen in the context of the definition 'relevant date' given under Section 11BB of the Central Excise Act. Thus, even going by the above decision and the provision in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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