TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 34
X X X X Extracts X X X X
X X X X Extracts X X X X
.....1998 under Section 27 of the Act for refund of customs duty amounting to Rs. 1,06,74,049/-, which was deposited on 04.06.1998. By order dated 23.10.2001, the Deputy Commissioner, rejected the application for refund of customs duty filed by the respondent-company, stating that the goods imported were not exempted and hence the respondent was not entitled to such refund. Challenging the said order, the respondent-company filed an appeal before the Commissioner of Customs (Appeals), Bangalore. By order dated 16.10.2002, the Commissioner held that the respondent-importer was eligible for benefit of exemption under the Notification dated 02.06.1998 and ordered refund of the amount, being Rs. 1,06,74,049/-, but after holding that the respondent-company had not been able to show that the burden of duty had not been passed on directly or indirectly to some other person, rejected the claim of refund on the ground of unjust enrichment, and directed the said amount to be credited in the account of the Consumer Welfare Fund. Challenging the said order of the Commissioner, the respondent-company filed an appeal before the Tribunal, which was allowed with consequential relief on 27.07.2005 afte....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1962 and the department is liable to pay interest on refund amount for such delay? ii. Whether the Explanation under Section 27A is to be read as Explanation relevant for order under Section 27(2) and not relevant for calculation of delay under Section 27A? iii. Whether the Tribunal is right in creating legal fiction that in every case of consequential refund initially rejected on merits by the department, if such rejection is set aside by the appellate for a, the department is liable to pay interest from the date of original claim till the date of sanction notwithstanding the fact that the matter is not pending with the department but is pending with the Courts? iv. Whether the Department would be liable to pay interest even when the refund amount was lying in the Consumer Welfare Fund for a substantial period? v. Whether the Department would be liable to pay interest even for the period when the payment of refund was stayed by the Hon'ble High Court in the CSTA No.4/2006?" 4. We have heard Sri C. Shashikantha, learned counsel for the appellant as well as Sri Ganapathi Hegde and Sri R.G. Sheth, learned counsel for the respondent and perused the record. 5. The entitlement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Apex Court specifically on this point in the case of Ranbaxy Laboratories Ltd., -vs- Union of India 2011 (273) E.L.T.3 (SC)] yet the Department has not paid the amount and has chosen to challenge the same. 8. On merits all that learned counsel for the appellant has submitted is that the customs duty was required to be refunded within three months, which according to the appellant would be from the order dated 21.02.2011 passed by the Supreme Court, whereby the SLP of the appellant had been dismissed and thus the appellant would not be liable to pay any interest. In support of his submission, he relies on Explanation to Section 27A of the Act. It has also been contended that the appellant would not be liable to pay interest because for a substantial period, the amount was lying with the Consumer Welfare Fund, and further during the pendency of the appeal before the High Court there was a stay order granted. 9. Per contra, learned counsel for the respondent-company has submitted that even the said Explanation clearly provides that the liability to pay interest would be from three months after the date of the application for refund of customs duty which was filed by the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e same cannot be interpreted that the liability to pay interest would be from the date of the order of the Tribunal or the Court, which may be passed in appeal. 12. While considering a similar case under the Central Excise Act, the Apex Court in Ranbaxy Laboratories Ltd., (supra) has interpreted under Section 11BB as well as the Explanation of the said Section in the same manner as has been held by the Tribunal. The provisions of Section 11BB of the Central Excise Act, 1944 and Section 27A of the Customs Act are parimateria as the Sections in both the Acts, with the same wordings, were inserted by No.22 of 1995. While considering the Explanation, the Apex Court held that the same "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 bec....