2023 (8) TMI 1160 - AT - Customs

Interest rate on delayed refund upheld at 6% by Tribunal, rejecting appellant's request for 9%. Financial constraints not considered.

The Tribunal upheld the Commissioner (Appeals) decision to grant interest on delayed refund at the notified rate of 6%, rejecting the appellant's request ... Interest on delayed refund at notified rate of interest (6%) to the appellant - enhanced rate of interest disallowed - HELD THAT:- In the case of THE COMMISSIONER OF CUSTOMS AIR PORT AND AIR CARGO COMPLEX, BANGALORE VERSUS M/S PFIZER PRODUCTS INDIA PVT. LTD. [2015 (9) TMI 34 - KARNATAKA HIGH COURT] as well as RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [2011 (10) TMI 16 - SUPREME COURT] there was huge delay in granting the refund. The Hon’ble Apex Court had considered all such facts to grant increased rate of interest. The Commissioner (Appeals) has relied on the said cases only to take the view that the appellant is eligible for interest due to delay. This does not mean that an assessee is always eligible for enhanced rate of interest than the notified rate of interest - there are no circumstances in the present case warranting to grant increased rate of interest to the appellant. The decision in the case of M/S BBM IMPEX PVT. LIMITED VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS (PREVENTIVE) , NEW DELHI [2022 (8) TMI 1118 - CESTAT NEW DELHI] is not applicable to the facts of this case as the same is with regard to the refund of pre-deposit. Appeal is dismissed as being devoid of merits. Issues involved:The appeal against the order granting interest on delayed refund at the notified rate of interest and disallowing the prayer for an enhanced rate of interest.Summary:The appellant, a shipping services company, filed a Bill of Entry for clearance of goods with a declared classification that was later disputed by the Department. This resulted in the appellant paying a substantial duty amount, which was later refunded after a significant delay. The appellant sought interest on the delayed refund at a higher rate than the notified 6%. The Commissioner (Appeals) granted interest at 6%, leading to the current appeal before the Tribunal.Details:- The appellant argued that the goods were meant for tourism purposes, and the incorrect classification imposed financial constraints, leading to borrowing loans at high interest rates. They requested interest at 9% for the delay period.- The appellant cited legal precedents to support their claim for enhanced interest rate, emphasizing the financial burden and hardships faced due to the delayed refund.- The Respondent contended that interest is payable only after 3 months from the refund application date and that the notified rate of 6% was correctly applied in this case without any special circumstances warranting a higher rate.- The Tribunal considered the delay of 253 days in granting the refund and the Commissioner (Appeals) decision to award interest at 6%. It noted that previous cases granting enhanced interest rates involved significant delays, which was not the case here.- The Tribunal upheld the Commissioner (Appeals) decision, stating that the circumstances did not justify a higher interest rate than the notified rate of 6%, dismissing the appeal for lack of merit.The judgment was pronounced on 24.08.2023 by the Appellate Tribunal CESTAT CHENNAI.