Tribunal orders interest payment on delayed refund claim under Customs Act, 1962

The Tribunal ruled in favor of the appellants in a case concerning delayed processing of a refund claim and eligibility for interest on delayed refund payment. Despite initial rejection of the refund claim due to missing documents, the Tribunal directed the refund sanctioning authority to grant interest to the appellants under Section 27A of the Customs Act, 1962, for the delay in payment. The authority was ordered to process the interest payment within three months. The appeal was allowed, ensuring the appellants receive appropriate interest on the delayed refund payment as per the Customs Act, 1962.

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Issues:
1. Delayed processing of refund claim.
2. Eligibility for interest on delayed refund payment.

Issue 1: Delayed processing of refund claim
The appellants filed a refund claim for the refund of 4% SAD as per Notification No. 102/2007-Cus. dated 14.9.2007. Despite the appellant's efforts and reminders, the refund claim was not processed in a timely manner. The Order-in-Original dated 14.10.2016 rejected the refund claim citing the lack of essential documents. The matter was remanded by the Commissioner (Appeals) to the original authority for processing the refund claim and considering the interest request. The refund claim was transferred to the Air Cargo Commissionerate, and the refund was finally sanctioned on 29.5.2018 without granting any interest. The Commissioner (Appeals) remanded the matter again for consideration of interest on the delayed refund. The appellant argued for interest under Section 27A of the Customs Act, 1962, due to the delay in sanctioning the refund.

Issue 2: Eligibility for interest on delayed refund payment
The main contention revolved around the appellant's request for interest on the delayed payment of the refund. The refund sanctioning authority acknowledged that the refund claim was filed on 29.3.2016, but the refund was only sanctioned on 29.5.2018, indicating a significant delay. The appellant consistently communicated with the department to expedite the refund processing. Considering the delay and the appellant's eligibility for interest under Section 27A of the Customs Act, 1962, the Tribunal found in favor of the appellant. The Tribunal directed the refund sanctioning authority to grant interest to the appellant from the date of filing the refund claim until the payment of the refund. The authority was instructed to process the interest payment within three months from the date of the Tribunal's order.

In conclusion, the Tribunal modified the impugned order to include the grant of interest on the delayed payment of the refund. The appeal was allowed with consequential relief, if any, ensuring that the appellants receive the appropriate interest for the delayed refund payment as per the provisions of the Customs Act, 1962.

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