2019 (11) TMI 1609 - AT - Customs

Tribunal grants interest on refund claim, emphasizing judicial precedents and entitlement.

M/s. Hindustan Motors Limited Versus Commissioner of Customs, CGST & Service Tax &Central Excise, Indore, M.P.

M/s. Hindustan Motors Limited Versus Commissioner of Customs, CGST & Service Tax &Central Excise, Indore, M.P. - TMI Issues:Refund claim of interest on the refund allowed to the appellant.Analysis:The appellant, M/s. Hindustan Motors, filed a refund claim for customs duty paid under protest, which was initially rejected by the Deputy Commissioner. However, the Order-in-Appeal set aside the rejection, allowing the refund. Subsequently, the appellant applied for interest on the refund amount, which was denied by the Original Adjudicating Authority and upheld in the Order-in-Appeal under challenge, leading to the current appeal.The main issue in the case revolved around determining the relevant date for the award of interest on the sanctioned refund. The appellant argued that interest should be calculated from the date of the original refund application in 2005, citing relevant legal precedents such as the decision in Ranbaxy Laboratories Ltd. vs. Union of India. On the other hand, the Department justified its decision based on Section 27(2) of the Customs Act, 1962.After considering the arguments from both parties and analyzing the legal provisions, the Tribunal concluded that interest on the refund should be calculated from the date of the original refund application in 2005. The Tribunal referenced previous judgments, including the case of Union of India vs. Shreeji Colour Chem Industries and M/s. Om Refoils Ltd. vs. Union of India, to support their decision. These cases clarified that interest should be paid from the date of the application for refund under the relevant provisions of the law.Based on the legal principles and precedents discussed, the Tribunal found that the adjudicating authorities had erred in denying the appellant's entitlement to interest on the refund claim. Therefore, the Tribunal set aside the order under challenge and allowed the appeal in favor of the appellant.In conclusion, the Tribunal's decision emphasized the importance of adhering to judicial precedents and legal provisions in determining the entitlement to interest on sanctioned refunds. The judgment clarified the relevant date for calculating interest on refunds and upheld the appellant's right to receive interest from the date of the original refund application in 2005.