2007 (12) TMI 388 - AT - Customs

Tribunal remands Revenue's appeal on interest dispute over bank guarantee encashment.

The appeal by the Revenue was allowed by the Tribunal, remanding the case back to the Commissioner (Appeals) for fresh consideration. The dispute revolved ... Interest on delayed refund - Excess encashment of Bank guarantee Issues involved: Dispute regarding interest on delayed payment of refund.Summary:The case involved an appeal by the Revenue against an order passed by the Commissioner (Appeals). The appellant had paid duty during import and clearance of steel items, along with providing bank guarantees. After adjudication, the duty amount was confirmed, and penalties were imposed. The Tribunal directed the appellant to deposit the differential duty amount and granted a waiver of pre-deposit of penalty. However, before the stay order was passed, the Revenue had already encashed a bank guarantee in excess of the determined duty amount. The Tribunal ultimately confirmed the duty amount and upheld a penalty on the partner. The respondent was entitled to a refund of the excess amount encashed by the Revenue. The dispute in the appeal centered around the interest on the delayed payment of the refund.The appellate authority had allowed interest on a part of the refund amount for a specific period. The Revenue contended that the encashed amount was towards penalty, not duty, and therefore, the interest provisions of Section 11BB would not apply. Section 11BB pertains to interest on duty refunded. The Tribunal agreed with the Revenue's legal contention, stating that Section 11BB specifically refers to the refund of duty amount. The matter was remanded to the Commissioner (Appeals) for fresh consideration in light of the Revenue's submissions.In conclusion, the appeal was allowed by way of remand, with the case being pronounced in court on 6-12-2007.