Customs Tribunal Invalidates Review Order, Grants Interest from Deposit to Refund Date

The Tribunal held that the review order under Section 129D(2) of the Customs Act was invalid as the refund order was not under the Act. It also determined that the appellant was entitled to interest from the date of deposit in May 1996 to the refund date in December 2015. The appeal was allowed in favor of the appellant, and the order limiting the interest period was set aside.

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Issues Involved:
1. Validity of the review order under Section 129D(2) of the Customs Act, 1962.
2. Entitlement of interest on the refunded amount from the date of deposit to the date of actual refund.

Issue-wise Detailed Analysis:

1. Validity of the Review Order under Section 129D(2) of the Customs Act, 1962:
The appellant argued that the amount deposited during the investigation was neither a customs duty nor a pre-deposit made pursuant to any order by the department. The appellant claimed a refund based on a favorable High Court order dated 15-7-2015, which quashed the show cause notice and allowed the appellant to seek recovery of the deposited amount with interest. The Assistant Commissioner sanctioned the refund along with interest, but the Commissioner of Customs reviewed this order under Section 129D(2) and directed an appeal before the Commissioner (Appeals). The Tribunal found that the amount deposited was not considered as 'duty' or 'pre-deposit' under the Customs Act, 1962. Thus, the review order under Section 129D(2), which only applies to decisions or orders under the Act, was deemed erroneous and not maintainable.

2. Entitlement of Interest on the Refunded Amount:
The primary contention was the period for which the appellant was entitled to interest on the refunded amount. The appellant claimed interest from the date of deposit (May 1996) till the actual refund date (22-12-2015). The Commissioner (Appeals) limited the interest period from 15-10-2015 (three months after the High Court order) to 22-12-2015. The Tribunal noted that the amount deposited was not adjudicated as customs duty and was kept in a suspense account. The High Court order explicitly allowed the appellant to seek recovery of the deposited amount with interest. As the show cause notice was quashed and no adjudication occurred, the Tribunal held that the appellant was entitled to interest from the date of deposit to the date of refund. The Tribunal cited that the order dated 15-7-2015 by the High Court was clear and should not be interpreted to deny the interest benefit.

Conclusion:
The Tribunal concluded that the review order under Section 129D(2) was invalid as the refund order was not under the Customs Act, 1962. It also held that the appellant was entitled to interest from the date of deposit (May 1996) to the date of refund (22-12-2015). The appeal was allowed in favor of the appellant, and the impugned order limiting the interest period was set aside.

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