9911796707
TMI Blog2016 (9) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... hs from the date of receipt of such application, till the date of refund. the decision in the case Ranbaxy Laboratories Ltd Vs. Union of India [2011 (10) TMI 16 - Supreme Court of India] would apply. The Petitioner had not complied with the conditions of the Essentiality Certificate. It therefore held that the Essentiality Certificate could not be taken to be the basis of the refund and accordingly rejected the refund application of the Petitioner. This order dated 13th December, 2011 was thereafter subjected to an appeal and as well as further proceedings , which finally culminated in a refund being granted to the Petitioner on 23rd June, 2014 in the sum of ₹ 1,89,15,549/-. As no interest was granted on this refund, the Petitioner challenged the said order - Held that: - the statutory provisions are clear that where there is a delay in the grant of refund, then interest must follow. It is only the calculation thereof which would be determined by the Authority - applicant entitled to interest. Necessary action to be taken against the Secretary, Ministry of Finance (Department of Revenue), Government of India and the Chairman, Central Board of Excise and Customs, New Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations undertaken under petroleum exploration licenses. It is not in dispute before us that the spares and consumables imported by the Petitioner are covered under the said Notification, subject to the conditions set out therein. Condition No.29 of the said Notification required the Petitioner, as a sub-contractor of ONGC, to produce an Essentiality Certificate from the Directorate of Hydrocarbons (for short the DGH ), which would be issued only on the recommendation of ONGC. 4. It is then stated that the Petitioner could not avail of the exemption under the said Notification at the time of import, for want of the Essentiality Certificate from the DGH as ONGC did not issue any recommendation letters for issuance of the same. Accordingly, for import of the said spares and consumables, the Petitioner filed Bill of Entry No. 1744 dated 27th September, 2002 without claiming any benefit under the said Notification and paid the applicable duty of ₹ 1,89,15,549/- on 14th October, 2002 and took clearance of the said goods. 5. Due to the persistent refusal on the part of ONGC to issue the recommendatory letters required for issuance of the Essentiality Certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 13th December, 2011 (page 67 of the paper book) rejecting the refund claim of the Petitioner. The operative part of this order reads as under:- 14(d): On receipt of the aforesaid Essentiality Certificate dated 13.03.2003, I now proceed to process the refund claim dated 4.4.2003 in respect of the goods cleared on payment of duty for which the Importer has filed the present refund claim application under Part-A including various documents such as Original Bill of Entry, Import Invoices, Original Essentiality Certificate stating that the goods cleared on payment of customs duty are covered by a Essentiality Certificate issued by DGH by virtue of which the goods cleared on payment of duty were liable to be refunded. I find that the Importer has fulfilled the conditions of Notification 21/2002 dated 1.3.2002, Sr. No. 214 of Table, List 12, Condition 29, by submitting the Essentiality Certificate. I, however, find the Essentiality Certificate was issued subject to the condition that the left over items are subject it Re-export by 30.4.2004. Examining the records, I find that some of the goods were exported vide Shipping Bill No.1000003625 dated 07.12.2004 i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistry of Finance, Central Board of Customs and Excise. 11. However, as the Petitioner was not granted any interest against this refund amount, the Petitioner filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals), after considering the statutory provisions and more particularly Section 27A, as well as the case law relied upon by the Petitioner, opined that as per the aforesaid section, the Petitioner was eligible for interest on delayed refund. However, the Refunding Authority had nowhere in the entire order discussed the issue of interest which, according to the Commissioner (Appeals), ought to have been examined by it. The Commissioner (Appeals) further held that the decisions relied upon by the Petitioners were squarely applicable to the facts of the present case and hence concluded that since the calculation of interest was not possible at his level, the matter needed to be remanded. Accordingly, the Petitioner was directed to cooperate and furnish all submissions before the Refunding Authority and the Refunding Authority was to decide this issue within six week's time. It is pursuant to this direction that the Refunding Authority has passed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 12th May, 2014, is wholly perverse and does not find any support even from the provisions of Section 27A. He submitted that the Refunding Authority by its order dated 13th December, 2011 (page 67 of the paper book) rejected the refund application of the Petitioner on merits and not on the ground that the same was incomplete. He submitted that this is ex-facie apparent from the operative part of the order (and which is reproduced by us earlier). For all the aforesaid reasons, Mr Shah submitted that the impugned order is liable to the quashed and set aside and the Refunding Authority ought to be directed to calculate the interest payable on the refund granted to the Petitioner. 13. On the other hand, Mr. Jetly, learned counsel appearing on behalf of the Respondents, submitted that the interest free period of three months for processing the claim would start from the date of receipt of a complete refund application. In this regard, he placed reliance on Circular No. 59 of 1995 dated 5th June, 1995, issued by the Government of India, Ministry of Finance, (Department of Revenue), Central Board of Excise and Customs, New Delhi. He placed reliance on paragraph 3 of this Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Book with effect from 26 May, 1995 and reads as under:- 27-A. 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 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 27 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, till the date of refund of such duty. Explanation .-Where any order of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11-B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below the proviso to Section 11-BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise but by an appellate authority or the court, then for the purpose of this section the order made by such higher appellate authority or by the court shall be deemed to be an order made under sub-section (2) of Section 11-B of the Act. It is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11-BB of the Act. 13. Manifestly, interest under Section 11-BB of the Act becomes payable, if on expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentations, it has been observed that in majority of the cases, no reason is cited. Wherever reasons are given, these are found to be very vague and unconvincing. In one case of consequential refund, the jurisdictional Central Excise Officers had taken the view that since the Tribunal had in its order not directed for payment of interest, no interest needs to be paid. 2. In this connection, the Board would like to stress that the provisions of Section 11-BB of the Central Excise Act, 1944 are attracted automatically for any refund sanctioned beyond a period of three months. The jurisdictional Central Excise Officers are not required to wait for instructions from any superior officers or to look for instructions in the orders of the higher appellate authority for grant of interest. Simultaneously, the Board would like to draw attention to Circular No. 398/31/98-CX, dated 2-6-1998 [(1998) 100 ELT T-16] wherein the Board has directed that responsibility should be fixed for not disposing of the refund/rebate claims within three months from the date of receipt of application. Accordingly, the jurisdictional Commissioners may devise a suitable monitoring mechanism to ensur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 21/2002 dated 1.3.2002, Sr. No. 214 of Table, List 12, Condition 29, by submitting the Essentiality Certificate. The Refunding Authority, however, held that the Essentiality Certificate was issued subject to the condition that the left over items are subject to Re-export by 30th April, 2004. Examining the records, the Refunding Authority came to a finding that some of the goods were exported beyond the expiry date of 30th April, 2004 and in view thereof, the Refunding Authority found that the Petitioner had not complied with the conditions of the Essentiality Certificate. It therefore held that the Essentiality Certificate could not be taken to be the basis of the refund and accordingly rejected the refund application of the Petitioner. This order dated 13th December, 2011 was thereafter subjected to an appeal and as well as further proceedings (as more particularly set out earlier), which finally culminated in a refund being granted to the Petitioner on 23rd June, 2014 in the sum of ₹ 1,89,15,549/-. As no interest was granted on this refund, the Petitioner challenged the said order before the Commissioner (Appeals). The Appellate Authority (by its order dated 27th October ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Essentiality Certificate. Hence the refund application was rejected on merits. This being the position, we are unable to accept the arguments of Mr Jetly that the refund application filed by the Petitioner was complete in all respects only in May 2014. 22. In light of these facts, and having rejected Mr. Jetly s argument, we have no hesitation in setting aside the impugned order dated 29 April, 2016 and holding that the Petitioner would be entitled to interest on the sum of ₹ 1,89,15,549/- from the date immediately after expiry of three months from 20th June, 2011 till 11th July, 2014 (being the date when the refund was actually paid to the Petitioner). For the limited purpose of calculating and paying this interest, the matter is remanded back to the Refunding Authority. It is clarified that the Refunding Authority shall not undertake any other or further exercise, other than to calculate interest on the refund amount and in terms of what is stated earlier. We grant the Authority six weeks time, which shall commence from the date of receipt of a copy of this order, for the above purpose. 23. For all the aforesaid reasons, rule is made absolute in the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
