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TMI Blog2015 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... our considered view, the appellant is entitled for the statutory interest from 24.03.1999 to the date when the refund was eventually paid i.e. 13.04.2011. Though, the refund amount was paid to the claimant-appellant consequent upon dismissal of SLP filed by the revenue, but the date of computation of the interest amount will commence from the date of cessation of three months of the refund application, and not from the date, when the refund amount was finally paid. - beneficiary of the principal amount is entitled for compensation in the form of interest because; he is deprived of its right of claim for a considerable period of time at the discretion of the person responsible for paying the amount. - Following decision of J.K. Cement Works -Vs:- Asst. Commissioner of Central Excise & Customs, reported in [2004 (2) TMI 78 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR] - Impugned order is set aside - Decided in favour of assessee. - Appeal No. C/610/2012-DB - Final Order No. 22049/2014 - Dated:- 21-5-2014 - B. S. V. Murthy And S. K. Mohanty,JJ. For the Appellant : Mr R G Sheth, Adv For the Respondent : Mr N Jagdish, Superintendent ORDER Order Per : S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Karnataka High Court vide order dated 01.04.2010. The said order was challenged by the revenue before the Hon'ble Supreme Court by filing the SLP, which was dismissed on 21.02.2011 on the ground of delay as well as on merits. Consequent upon dismissal of SLP by the Hon'ble Supreme Court, the original authority vide order dated 13.04.2011 had sanctioned the refund claim and released the payment of the excess customs duty to the appellant. However, the interest for delayed sanction of refund was not paid, despite specific request being made by the appellant for the same. Hence, feeling aggrieved by such an order, the appellant preferred appeal before the Commissioner (Appeals), which was rejected on the ground indicated in the preceding paragraph. Hence, the present appeal before this Tribunal. 3. The learned Advocate appearing for the appellant submitted that interest is liable to be paid by the Revenue within three months from the date of filing the original refund claim; that provisions of Section 27A of the Customs Act, 1962 are attracted automatically for any refund sanctioned beyond the period of three months. The learned Advocate has referred to the CBEC Circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (2) of Section 27 of the Act has been passed to refund the amount to the applicant, then the same has to be refunded within three months from the date of filing the refund application under sub-section (2) of Section 27; and due to any reason, if such amount is not refunded within such prescribed time limit, then interest on the refund amount is liable to be paid by the Customs department at the prescribed rate, on expiry of period of three months from the date of receipt of such refund application. 9. An explanation has been appended to Section 27A of the Act, which introduced the deeming fiction that in case of any order of refund passed by the Commissioner (Appeals), Appellate Tribunal or any Court against the order of Assistant/Deputy Commissioner of Customs under sub-section (2) of Section 27 of the Act, the order passed by such Appellate Authorities or by the Court(s) shall be deemed to be an order passed under such sub-section. 10. On a conjoint reading of Section 27 and 27A of the Act (discussed supra), it transpires that once an order is passed by the competent Customs authorities pursuant to the refund application filed by the applicant, then the refund s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence including the documents referred to in section 12A as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from or paid by him and the incidence of such duty and interest if any, paid on such duty had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act: Provided further that the limitation of one year shall not ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2). (4) .. (5) .. Section 11BB, the pivotal provision, reads thus: 11BB. Interest on delayed refunds:- If any duty ordered to be refunded under sub-section (2) of section 11B to any 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 per cent and not exceeding thirty per cent 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 section 11B in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsiderable time, the refund amount was lying with the Consumer Welfare Fund and not with the department, and therefore, no interest is payable to appellant, in absence of any delay of sanction of refund amount, is implausible and is contrary to the statutory provisions. The object behind insertion of interest provisions in Section 27A of the Act is that interest is compensatory in character. The beneficiary of the principal amount is entitled for compensation in the form of interest because; he is deprived of its right of claim for a considerable period of time at the discretion of the person responsible for paying the amount. In context with the issue in hand, the Hon'ble Rajasthan High Court in the case of J.K. Cement Works -Vs:- Asst. Commissioner of Central Excise Customs, reported in 2004 (170) ELT 4 (Raj.) has held as follows:- 33. A close reading of Section 11BB, which now governs the question relating to payment of interest on belated payment of interest, makes it clear that relevant date for the purpose of determination the liability to pay interest is not the determination under sub-section (2) of Section 11B to refund the amount to the applicant and not to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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