Customs, Excise and Services Tax Appellate Tribunal (CESTAT): P. Venkata Subba Rao (Technical Member) allowed an appeal which was filed against the judgment of Commissioner (Appeals).
The appellant imported Benzothiazole through Visakhapatnam Port declaring an assessable value of US$ 3.5 per Kg being the transaction value. The Assistant Commissioner enhanced it to 4.3523 per Kg. The appellant paid the enhanced duty under protest and appealed to Commissioner (Appeals) who set aside the enhancement. Thereafter the appellant had filed an application for refund of the excess duty paid by them. The Assistant Commissioner rejected the refund claim and on appeal, the rejection of refund was upheld by Commissioner (Appeals).
The Assistant Commissioner had sanctioned the refund but had not paid interest. On appeal Commissioner (Appeals), by the impugned order, held that the liability to pay interest arises only if the refund was not made within three months from the date of receipt of the Tribunal’s Order. Since the refund had been paid within three months from the date of receipt of the Tribunal’s order no interest was payable.
The counsel for the appellant, M. Rajendran submitted that it was a well-settled principle of law that interest had to be paid if the refund was not sanctioned within three months from the date of refund application.
The Tribunal explained that Section 27A of the Customs Act, 1962 provided for the payment on interest on delayed refunds. The Tribunal further stated that if there was any delay in sanctioning the amount of refund if any available to the appellant as per the Tribunal’s Order he can make a claim of the same from the Department. The respondent had sanctioned the refund of Duty and Interest vide impugned order which was well within the time period of three months from the date of order of Appellate Tribunal. Hence the interest on delayed refund under the provisions of Section 27A of Customs Act, 1962 does not arise in the present case. The Tribunal allowed the appeal finding that the appellant was entitled to interest on the delayed refunds from three months from the date of receipt of refund application till the date of which the refund has actually been paid and orders the Department to pay the interest.[Andhra Organics Ltd. v. Commr. Of Central Tax, 2020 SCC OnLine CESTAT 328, decided on 10-11-2020]
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