2023 (2) TMI 621 - AT - Customs

Tribunal Confirms Interest on Delayed Customs Refunds Starts 3 Months Post-Application, Rejects Revenue's Appeal.

The Tribunal upheld the Commissioner (Appeals)' decision, dismissing the Revenue's appeals and affirming the respondents/assessees' entitlement to ... Interest on Refund of excess paid CVD - interest was denied to the respondents/assessees on the ground that the matter was sub-judiced before the CESTAT and the refund claims were disposed of within the period of three months of the said order - Commissioner (Appeals) allowed claim of interest - HELD THAT:- As per the law laid down by the Hon’ble Apex Court in the case of M/s Ranbaxy Laboratories Ltd [2011 (10) TMI 16 - SUPREME COURT] wherein Hon’ble Apex Court has held that the Revenue is liable to pay interest under Section 11BB of the Act and the period commences from the date of expiry of three months from the date of receipt of the application for refund under Section 11B(1) of the Act and not on the expiry of said period from the date on which the order of refund is made.s per the law laid down by the Hon’ble Apex Court in the case of M/s Ranbaxy Laboratories Ltd (supra) wherein Hon’ble Apex Court has held that the Revenue is liable to pay interest under Section 11BB of the Act and the period commences from the date of expiry of three months from the date of receipt of the application for refund under Section 11B(1) of the Act and not on the expiry of said period from the date on which the order of refund is made. Further, It is found that the ld. Commissioner (Appeals) in the impugned order came to the conclusion that the respondents/assessees are entitled to interest as per Section 27(A) of the Customs Act, 1962 at the applicable rate of interest as prescribed vide notification issued under Section 27(A) from time to time after expiry of three months from the date of receipt of refund application till the date on which the refund has actually been paid. There is no infirmity in the impugned order and there is no need of any interference in the impugned order - Appeal dismissed. Issues Involved:- Entitlement to interest on delayed refund under Section 27(A) of the Customs Act, 1962.Analysis:- Issue 1: Entitlement to interest on delayed refund under Section 27(A) of the Customs Act, 1962 - The case involved appeals by the Revenue against an order allowing refund claims by the respondents/assessees. The respondents contended that they were entitled to interest on the refund claims filed. The Revenue argued that the claims were processed within the stipulated time limit of three months and were sanctioned as per Section 27(2) of the Customs Act, 1962. - The Commissioner (Appeals) had allowed the appeals of the respondents/assessees, granting them interest on the delayed refund. The Revenue challenged this decision, asserting that interest should be paid from the date of the Tribunal's decision. However, the respondents' counsel cited legal precedents to support their claim for interest. - Upon reviewing the submissions, the Tribunal referred to the decision of the Hon'ble Apex Court in a relevant case, emphasizing that interest under Section 11BB of the Act accrues from the expiry of three months from the refund application date. The Tribunal noted that the Commissioner (Appeals) correctly interpreted Section 27(A) of the Customs Act, 1962, and relied on legal judgments to support the entitlement to interest on delayed refunds. - The Tribunal upheld the impugned order of the Commissioner (Appeals), dismissing all five appeals filed by the Revenue. The respondents/assessees were deemed entitled to interest as per Section 27(A) of the Customs Act, 1962, at the applicable rate from three months after the refund application date until the actual payment date.This comprehensive analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's decision, ensuring a detailed understanding of the case.