2007 (12) TMI 120 - AT - Customs

Tribunal rules EDD collected without legal sanction must be refunded with interest. Revenue's appeal dismissed.

The Tribunal upheld the Commissioner (Appeals)'s decision, ruling that the EDD collected between 25-8-2000 and July 2001 had to be refunded with interest ... Imports of engines and its parts were assessed with a loading of Extra Duty Deposit (EDD) pending final determination if the value of such imports was depressed - in the light of the Apex Court’s judgment assessee submits that the extra amounts illegally collected had to be returned suo motu – hence GMMCO approached the department for refund of the EDD made during the period 25-8-2000 and July 2001 – refund sustainable with interest u/s 27A – revenue’s appeal rejected Issues:1. Refund of Extra Duty Deposit (EDD) collected for imports between 25-8-2000 and July 2001.2. Applicability of Section 27 of the Customs Act for refund claims.3. Grant of interest on the refunded amount.Analysis:1. The case involved the refund of Extra Duty Deposit (EDD) collected for imports between 25-8-2000 and July 2001. Initially, the value of imports by M/s. GMMCO Ltd. from M/s. Caterpillar Far East Ltd. was assessed with EDD pending final determination of any value depression due to the relationship between the supplier and GMMCO. The Tribunal's Final Orders dated 25-8-2000 found the declared value acceptable for assessment. Despite the Apex Court's dismissal of the Department's appeal against these orders, EDD was collected for the mentioned imports. The Commissioner (Appeals) ruled that the EDD collected during this period had to be refunded with interest as it was collected without legal sanction.2. The revenue filed an appeal seeking to vacate the Commissioner (Appeals)'s order, arguing that refunds could only be granted against claims made under Section 27 of the Customs Act. They contended that since the respondents had not made a claim as prescribed under Section 27, the admissibility of the refund could not be examined. However, the respondents claimed that the excess amounts illegally collected had to be returned suo motu, referencing an SVB Circular advising finalization of assessments in light of the Apex Court's judgment.3. Upon careful consideration, the Tribunal affirmed the Commissioner (Appeals)'s decision, stating that the respondents were eligible for a refund of the excess amounts collected. The Act allows for the grant of interest in cases where there is a delay in sanctioning refunds beyond three months of filing the claim under Section 27A. The Tribunal found the revenue's challenge to be without merit concerning the excess amount collected and the interest under Section 27A. Consequently, the appeal filed by the revenue was dismissed, and the impugned order for refund with interest was upheld.