Customs Tribunal grants interest on delayed refund, emphasizing statutory obligation for compensation.

The Tribunal allowed the appeal, granting the appellant interest on the delayed refund amount from 24.03.1999 to 13.04.2011. The decision emphasized the Customs authorities' statutory obligation to pay interest on delayed refunds to compensate claimants for the extended period of deprivation of their rightful dues.

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Issues Involved:
1. Entitlement to interest for delayed sanction of refund of Customs duty.
2. Relevant date for computation of interest on delayed refund.

Detailed Analysis:

1. Entitlement to Interest for Delayed Sanction of Refund of Customs Duty:
The appellant filed a refund claim for excess Customs duty paid on 24.12.1998, which was ultimately sanctioned on 13.04.2011, a delay of over 12 years. The Customs authorities rejected the appellant's claim for interest on the delayed refund, arguing that the refund was sanctioned within three months from the Supreme Court's dismissal of the department's Special Leave Petition (SLP). The Tribunal examined Section 27A of the Customs Act, 1962, which mandates that if a refund is not paid within three months from the date of filing the refund application, interest is payable on the delayed amount. The Tribunal emphasized that the interest is compensatory in nature, intended to compensate the claimant for being deprived of their rightful claim for an extended period.

2. Relevant Date for Computation of Interest on Delayed Refund:
The Tribunal clarified that the relevant date for computing interest is three months from the date of filing the refund application, not from the date of the Supreme Court's decision. The Tribunal referred to the explanation in Section 27A, which deems orders of refund by appellate authorities or courts as orders under sub-section (2) of Section 27 for the purpose of interest computation. The Tribunal relied on the Supreme Court's judgment in M/s Ranbaxy Laboratories Ltd. vs. Union of India, which held that interest under Section 11BB of the Central Excise Act, 1944 (analogous to Section 27A of the Customs Act) becomes payable if the refund is not made within three months from the date of receipt of the refund application. The Tribunal concluded that the appellant is entitled to interest from 24.03.1999 (three months after the refund application) to 13.04.2011 (the date of refund payment).

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, granting the appellant consequential relief, including the payment of interest on the delayed refund amount from 24.03.1999 to 13.04.2011. The Tribunal's decision underscores the statutory obligation of Customs authorities to pay interest on delayed refunds, compensating claimants for the undue delay in receiving their rightful dues.

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