Revenue appeals dismissed following CBIC National Litigation Policy instructions on customs duty refunds

CESTAT Chandigarh dismissed two revenue appeals without examining merits, following National Litigation Policy instructions dated 02.11.2023 issued by CBIC. The appeals concerned refund of excess customs duty with interest at prescribed rates - Rs.7,89,678 in one case and Rs.13,590 in another, calculated at 12% from deposit date till refund date. Revenue had rejected refunds claiming NIC had not confirmed integration of customs duty payments. Tribunal relied on precedent in Commissioner of Customs ICD Patparganj v. VSM Impex Pvt. Ltd., where Division Bench rejected 26 similar revenue appeals as non-maintainable under CBIC instructions.

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Issues:
1. Grant of refund and interest by the Commissioner (Appeals).
2. Double payment of customs duty by the respondent.
3. Rejection of refund claims by the adjudicating authority.
4. Legality of interest granted under Section 27A of the Customs Act, 1962.
5. Applicability of National Litigation Policy on the appeals filed by the Revenue.

Issue 1: Grant of refund and interest by the Commissioner (Appeals):
The appeals by the Revenue were directed against the order granting refund with interest to the respondent by the Commissioner (Appeals). The respondent had filed refund claims for excess paid customs duty, supported by evidence of double payment on the same Bills of Entry. The Commissioner (Appeals) allowed the appeals, leading to the Revenue challenging the grant of interest from the date of deposit till the date of refund.

Issue 2: Double payment of customs duty by the respondent:
The respondent made double payments of customs duty for six Bills of Entry, as evidenced by the e-challans and payment transaction details submitted. The adjudicating authority observed discrepancies in the integration of payments with the Indian Customs EDI System, leading to the rejection of the refund claims based on the National Informatics Centre's response regarding the integration status of payments.

Issue 3: Rejection of refund claims by the adjudicating authority:
The adjudicating authority rejected the refund claims due to the lack of confirmation from the National Informatics Centre regarding the integration of excess payments. The authority emphasized the importance of proper documentation to establish the double payment and the crediting of the amount to the government exchequer.

Issue 4: Legality of interest granted under Section 27A of the Customs Act, 1962:
The learned Authorized Representative argued that the interest granted under Section 27A of the Customs Act, 1962 was not sustainable, emphasizing the incomplete application and lack of proof regarding the excess payment integration. The duty was paid under Section 27 of the Act, and the judgments cited were deemed inapplicable to the interest issue.

Issue 5: Applicability of National Litigation Policy on the appeals filed by the Revenue:
The Counsel for the respondent contended that the appeals by the Revenue were not maintainable under the National Litigation Policy, citing previous Tribunal decisions. The Commissioner (Appeals) was praised for granting interest and shifting the burden of verification to the department, leading to the argument that the appeals were not maintainable under the Policy.

In conclusion, the Tribunal dismissed the Revenue's appeals, citing the National Litigation Policy instructions issued by the CBIC. The issue of interest granted by the Commissioner (Appeals) was crucial, with the Tribunal finding the appeals not maintainable under the Policy, thereby upholding the decision to grant refund and interest to the respondent without delving into the case's merits.

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