CESTAT Mumbai Allows Interest on Delayed Customs Duty Refund for LNG Vessel Import

The Appellate Tribunal CESTAT MUMBAI ruled in favor of the respondent, allowing interest on a delayed refund sanction related to excess Customs duty paid on bunkers during the import of a Dredging vessel for LNG facility construction. Despite the Revenue's challenge, the Tribunal upheld the Commissioner's decision to grant interest, citing the absence of a stay on the refund implementation within three months as per CBEC Circular No. 967/01/2013-CX. The decision emphasized adherence to tribunal orders and judicial discipline, affirming the respondent's eligibility for interest on the refund amount.

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Issues:
1. Eligibility for interest on delayed refund sanction.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI involved a dispute regarding the eligibility of the respondent for interest on a delayed refund sanction. The case revolved around the import of a Dredging vessel for LNG facility construction and subsequent refund claims. The respondent initially paid excess Customs duty on bunkers during import, sought a refund upon re-export, and faced rejection leading to an appeal. The Commissioner (Appeals) set aside the original order and allowed the appeal with consequential relief, granting interest on the refund amount. The Revenue challenged this decision, arguing against granting interest until the High Court's decision on their appeal against the Tribunal's order.

The Tribunal, led by Member Ramesh Nair, analyzed the situation. Despite the Revenue's appeal against the Tribunal's order, no stay was granted by the High Court. The Tribunal noted that the Revenue had already sanctioned the refund, as per CBEC Circular No. 967/01/2013-CX, which mandates refund implementation if no stay is obtained within three months. Therefore, the Tribunal found no reason to withhold interest, considering the refund had been granted. The Commissioner (Appeals) had correctly emphasized the binding nature of the Tribunal's order in the absence of a stay, ensuring implementation for judicial discipline. Consequently, the Tribunal upheld the Commissioner's decision to grant interest and dismissed the Revenue's appeal.

In conclusion, the Tribunal affirmed the eligibility of the respondent for interest on the delayed refund sanction, in accordance with the Tribunal's order and judicial principles. The decision highlighted the importance of implementing tribunal orders in the absence of a stay, emphasizing judicial discipline and adherence to legal procedures.

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