Tribunal Rules on Interest Calculation in Refund Case, Sets Rate at 6%

The Tribunal held that interest on refund should be calculated from the date of the tribunal's final order, not the date of the Supreme Court judgment. The rate of interest was set at 6% in accordance with statutory provisions, rejecting a higher rate. The appellant's claim for interest on interest was denied as there is no statutory provision for it. The Tribunal partially allowed the appeal, agreeing on the rate of interest and interest on interest issues but disagreeing on the calculation of interest on refund.

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Issues involved:
1. Calculation of interest on refund from the date of the tribunal's final order or from the date of the tribunal's final order.
2. Determination of the appropriate rate of interest at 6%, 15%, or any other rate.
3. Entitlement of the appellant to interest on interest.

Analysis:

Issue 1 - Calculation of interest on refund:
The Tribunal held that interest liability arises from the date of the tribunal's final order and not from the date of the judgment of the Hon'ble Supreme Court. The Hon'ble High Court also affirmed this view, emphasizing that interest should be calculated from the date of the tribunal's order. Since this finding was not challenged by the revenue, it was deemed final. Consequently, the appellant is entitled to interest from the date of the tribunal's order and not from the expiry of three months from the order date.

Issue 2 - Determination of the rate of interest:
The statutory provision under section 27(A) prescribed a 6% rate of interest, which the departmental officer is obligated to adhere to strictly. The Tribunal clarified that it cannot decide a rate of interest beyond the statutory provisions and cited that judgments allowing higher interest rates were based on the inherent powers of the Supreme Court or High Court. Therefore, the Tribunal upheld the 6% interest rate determined by the Lower Authority and rejected the appellant's claim for a higher rate.

Issue 3 - Entitlement to interest on interest:
The appellant sought interest on interest amount, relying on a Supreme Court judgment. However, the Learned Commissioner (Appeals) concluded that there is no statutory provision for granting interest on interest. The Tribunal concurred with this view, stating that it cannot go beyond the provisions of the Customs Act. As a result, the decision to deny interest on interest by the Learned Commissioner (Appeals) was deemed legal and correct.

In summary, the Tribunal modified the impugned order, partially allowing the appeal by concurring with the Commissioner (Appeals) on the rate of interest and interest on interest issues but disagreeing on the calculation of interest on refund issue. The appeal was partly allowed based on the above terms.

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