TaxTMI 
TaxTMI 
2015 (4) TMI 159
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.... Department, the appellant is not entitled for interest thereon. 2. The brief facts of the case, leading to the present appeal, are as follows:- The appellant filed the Bill of Entry on 04.06.1998 for imported Milling Machines along with parts and accessories and paid Customs duty attributable to the imported consignment. Subsequently, it was detected by the appellant that the duty has been wrongly paid into the Government exchequer, owing to the reason that the imported goods were exempted from payment of duty under Notification No. 23/98 - CUS., dated 02.06.1998. Upon realization of such mistake, the appellant filed the application on 24.12.1998 before the Deputy Commissioner of Customs (Refund), Air Cargo Complex, Bangalore, claiming refund of Customs duty of Rs. 1,06,74,049/-. The refund application was rejected vide order dated 23.10.2001 on the ground that the imported goods were not exempted from payment of Customs duty. However, in the said order, it was held that the refund claim was within time limit and is not hit by the doctrine of unjust enrichment. Appeal filed by the appellant against the said order, though was allowed by the Commissioner (Appeals) vide order dated....
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....Tribunal in the present case is whether payment of interest for delayed sanction of the refund amount is in consonance with the provisions under the Customs statute. If the reply to the same is in affirmative, then what should be the relevant date from which the interest amount has to be computed. 6. It is an undisputed fact that the appellant had lodged the refund application before the jurisdictional Customs authorities on 24.12.1998, claiming refund of excess Customs duty paid on the importation of goods, which was ultimately sanctioned in favour of the appellant on 13.04.2011, involving a time gap of more than 12 years. 7. The provisions governing claim for refund of Customs duty is contained in Section 27 of the Customs Act, 1962. Sub-section (1) of the said section provides that any person desirous of claiming refund of duty paid or borne by him, has to file an application before the Assistant/Deputy Commissioner of Customs in the prescribed form and the documents that may be necessary for deciding the application are also to be submitted. As per the requirement of sub-section (2) of the said section, the said empowered authority under the statute is required to hold enquir....
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.... 27A of the Act, the time limit for payment of the refund amount to the appellant by the Customs authorities (without interest) expired on 23.03.1999. Since, claimed amount was finally paid to the appellant on 13.04.2011, in our considered view, the appellant is entitled for the statutory interest from 24.03.1999 to the date when the refund was eventually paid i.e. 13.04.2011. Though, the refund amount was paid to the claimant-appellant consequent upon dismissal of SLP filed by the revenue, but the date of computation of the interest amount will commence from the date of cessation of three months of the refund application, and not from the date, when the refund amount was finally paid. The explanation inserted in Section 27A has nothing to do with the deferment of the date from which interest becomes payable. In context with payment of interest on delayed refund of the Customs duty amount, we rely on the judgment of Hon'ble Supreme Court delivered in the case of M/s Ranbaxy Laboratories Ltd:- Vs:- Union of India, reported in 2011 (273) ELT 3 (S.C.). The principles enunciated in the said judgment though relate to Section 11B and Section 11BB of the Central Excise Act, 1944, but ....
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....ise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's current account maintained with the Commissioner of Central Excise; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify: Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government, the incidence of duty and interest, if any, paid ....
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.... is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. Manifestly, interest under Section 11BB of the Act becomes payable, if on an expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus....