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of <h1>Court invalidates Circular No.6/2008-Customs, orders refund processing under Customs Act.</h1> <h3>KSJ Metal Impex (P) Ltd. Versus The Under Secretary (Customs) Government of India Ministry of Finance Department of Revenue</h3> KSJ Metal Impex (P) Ltd. Versus The Under Secretary (Customs) Government of India Ministry of Finance Department of Revenue - 2013 (294) E.L.T. 211 (Mad.) Issues Involved:1. Validity of Circular No.6/2008-Customs, dated 28.4.2008, particularly paragraph 4.3.2. Entitlement of interest on delayed refunds under Section 27A of the Customs Act, 1962.Issue-Wise Detailed Analysis:1. Validity of Circular No.6/2008-Customs, dated 28.4.2008, particularly paragraph 4.3:The petitioner challenged Circular No.6/2008-Customs, dated 28.4.2008, which restricted the claim of interest on delayed refunds under Notification No.102/2007-Customs, dated 14.9.2007. The circular stated that there was no specific provision for payment of interest under the said notification, thus denying interest on delayed refunds. The court analyzed the provisions of the Customs Act, 1962, and the Customs Tariff Act, 1975, and found this reasoning inconsistent with the statutes. The court emphasized that the exemption notification under Section 25(1) of the Customs Act, 1962, and the refund process under Section 27 of the Customs Act, 1962, are independent but interconnected. The refund of special additional duty paid must be processed under Section 27, and if delayed, interest under Section 27A applies. The court concluded that paragraph 4.3 of the circular is contrary to the statutory provisions and must be struck down.2. Entitlement of interest on delayed refunds under Section 27A of the Customs Act, 1962:The petitioner argued that the department should pay interest on delayed refunds as per Section 27A of the Customs Act, 1962, which mandates interest if a refund is not made within three months from the date of receipt of the application. The respondents contended that the special additional duty refund under Notification No.102/2007-Customs is an automatic process and does not fall under Section 27, thus not attracting interest under Section 27A. The court rejected this argument, stating that the refund application must be processed under Section 27, and if delayed, interest under Section 27A is applicable. The court highlighted that the provisions of the Customs Act, 1962, and the Customs Tariff Act, 1975, clearly mandate this process, and any circular contrary to these provisions is invalid.Conclusion:The court allowed the writ petition, quashing paragraph 4.3 of Circular No.6/2008-Customs, dated 28.4.2008, as it was contrary to the statutory provisions. The court directed the respondents to consider the pending refund application of the petitioner in light of Sections 27 and 27A of the Customs Act, 1962.
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