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of <h1>Court sets aside order, directs interest payment on refund, emphasizes judicial discipline</h1> <h3>M/s. 3F Industries Limited Versus The Assistant Commissioner of Customs</h3> M/s. 3F Industries Limited Versus The Assistant Commissioner of Customs - 2020 (373) E.L.T. 463 (Mad.) Issues Involved:1. Applicability of the revised rate of duty on imported goods.2. Refund of differential duty and unjust enrichment.3. Interest on the refund claim.Detailed Analysis:1. Applicability of the Revised Rate of Duty on Imported Goods:The petitioner, engaged in the manufacture and sale of bakery fats, imported 2800.662 metric tonnes of RBD Palmolein (edible grade) in July 2001. Two bills of entry were filed on 03.08.2001 and 04.08.2001 for clearance of 2471.788 MT for home consumption. The Customs Department re-assessed the ex-bond bills of entry based on a new rate of duty prescribed on 03.08.2001, published in the Gazette on 06.08.2001. The petitioner contended that the original rate should apply as the revision would only be effective from the publication date, 06.08.2001. Despite this, the petitioner paid the differential duty under protest in September 2001.2. Refund of Differential Duty and Unjust Enrichment:The petitioner challenged the Department's demand for differential duty, which was decided in their favor on 04.06.2015. They claimed a refund on 03.02.2016, which was sanctioned but credited to the Consumer Welfare Fund due to unjust enrichment concerns. The petitioner’s appeal to the Commissioner (Appeals) was rejected, but a further appeal to the CESTAT resulted in a remand to the Assessing Authority to verify if the incidence of duty was passed on to the consumer. The CESTAT noted that the petitioner had completed the sale of goods before paying the differential duty and directed the original authority to examine supporting documents. However, the Assessing Officer, in the impugned order dated 09.02.2018, failed to properly address this issue, focusing instead on accounting entries.3. Interest on the Refund Claim:The petitioner argued that the refund was not a duty but an amount wrongfully collected, thus not subject to Section 27A of the Customs Act. The revenue disagreed, stating that any refunded amount bears the character of duty unless extorted without legal authority. The court referred to Section 27A, which mandates interest on delayed refunds if not paid within three months from the application date. The petitioner’s application was filed on 13.11.2017, and the refund was rejected on 09.12.2018. The court concluded that the differential duty was not passed on to consumers, thus no remand was necessary. The refund claim was allowed, and interest at 6% was ordered from 14.06.2016 until repayment.Conclusion:The court set aside the impugned order, allowing the writ petition. It directed the respondents to pay interest at 6% on the refunded amount from 14.06.2016 until the date of repayment, within four weeks from the order receipt. The decision emphasized the importance of judicial discipline and adherence to higher appellate authorities' orders.
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