2015 (1) TMI 751 - AT - Customs

Customs Tribunal Upholds Interest on Refunds Beyond 3 Months

Commissioner of Customs (Prev.), Jamnagar Versus M/s. Reliance Industries Limited

The Tribunal upheld the Commissioner (Appeals) Customs' decision to grant interest on refund claims beyond three months from the filing date. Despite the ... Delay in refund claim - Interest on refund claim - whether interest is required to be paid to the Respondent for delay in sanctioning of refund claims - Held that:- non production of documents will be only those documents which are prescribed so by the department and were required to be furnished along with the refund application. Any subsequent documents required by the department, which are not prescribed, can also be called for by the Revenue for their satisfaction but taking of such longer time for getting additional information for satisfaction cannot be made the ground for non payment of interest. - date of refund application and payment of interest after three months thereafter, cannot be postponed under any circumstances. If the view expressed by Revenue is accepted than in every refund claim department will ask for certain information and shift the burden on the assessees for not furnishing the required information/ documents in time. The whole purpose of Section 27A of the Customs Act, 1962 will be thus defeated. - Following decision of Ranbaxy Laboratories Limited vs. UOI [2011 (10) TMI 16 - Supreme Court of India] - Decided against Revenue. Issues:- Whether interest is required to be paid to the Respondent for delay in sanctioning of refund claims.Analysis:1. The appeals were filed by the Revenue against the Order-in-Appeal (OIA) dated 28.04.2014 passed by the Commissioner (Appeals) Customs, Jamnagar, which set aside the orders denying interest on refund claims beyond three months from the filing date.2. The Respondent imported Crude Petroleum Oil and paid National Calamity Contingent Duty (NCCD) under protest. After challenging the original orders, refund claims were sanctioned on 21.5.2013. The Revenue transferred the refunds to the consumer welfare fund due to 'Unjust Enrichment', leading to appeals and subsequent verifications.3. The Revenue argued that interest was not payable as required documents were provided late by the Respondent. On the contrary, the Respondent contended that all necessary documents were submitted in time, including Chartered Accountant's certificates.4. The Respondent cited various case laws to support their argument, emphasizing that asking for additional information not prescribed should not delay refund application dates.5. The issue revolved around Section 27A of the Customs Act, 1962, which mandates interest payment if refunds are not processed within three months. The Respondent maintained that prescribed documents were timely submitted, and any delay was on the Revenue's part in verification.6. The Tribunal noted the settled legal position that interest becomes payable after three months from the refund application date, irrespective of additional information requests by the Revenue. Refusing to interfere with the first appellate authority's orders, the Tribunal rejected the Revenue's appeals.This detailed analysis emphasizes the procedural history, legal arguments, relevant case laws, and the Tribunal's decision regarding the interest payment on delayed refund claims in the mentioned legal judgment.