TaxTMI 
TaxTMI 
2016 (9) TMI 881
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.....MUM-CUSTM-SMP-196/2015-16 dated 27th October, 2015, passed by the Commissioner of Customs (Appeals), as well as the order passed by this Court on 4th April, 2016 (and which is annexed at Exh. "B" to the Petition). 3. The brief facts giving rise to the present controversy are that, the Petitioner (formerly known as "Sedco Forex International Drilling Inc.") had imported certain spares and consumables etc for carrying out drilling operations on behalf of ONGC on board the mobile offshore drilling unit (Jack Up Rig) named F. G. McClintock. It is averred in the Petition that by Notification No.21/2002-Cus dated 1st March, 2002 (for short the "said Notification") the Central Government inter alia exempted goods required in connection with petroleum operations undertaken under petroleum exploration licenses. It is not in dispute before us that the spares and consumables imported by the Petitioner are covered under the said Notification, subject to the conditions set out therein. Condition No.29 of the said Notification required the Petitioner, as a sub-contractor of ONGC, to produce an "Essentiality Certificate" from the Directorate of Hydrocarbons (for short the "DGH"), which would be....
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....cation as being premature for want of the Essentiality Certificate. The Petitioner stated that the Essentiality Certificate was enclosed with the said refund application (filed on 4th April, 2003) but for the sake of easy reference, was again enclosing the same and requested the authorities to sanction the refund due to them. 8. In reply thereto, the department wrote a letter dated 21st July, 2011, requesting the Petitioner to submit certain documents, a list of which is set out in the impugned order (at page 210 of the paper book). These documents were forwarded by the Petitioner to the department under cover of their letter dated 2nd August, 2011. It transpires that thereafter the Refunding Authority passed its order dated 13th December, 2011 (page 67 of the paper book) rejecting the refund claim of the Petitioner. The operative part of this order reads as under:- "14(d): On receipt of the aforesaid Essentiality Certificate dated 13.03.2003, I now proceed to process the refund claim dated 4.4.2003 in respect of the goods cleared on payment of duty for which the Importer has filed the present refund claim application under Part-A including various documents such as Original Bill....
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....rder dated 5th February, 2014, set aside the order dated 22nd January, 2014 and remanded the case back to the Refunding Authority to decide the matter afresh after granting a hearing to the Petitioner. In pursuance of the order of the High Court dated 5th February, 2014, and after taking into consideration the documents submitted by the Petitioner, an order was passed by the Refunding Authority on 23rd June, 2014, sanctioning the refund of Rs. 1,89,15,549/-. Pursuant to the aforesaid order of refund, the Petitioner also received cheque No. 026271 dated 11th July, 2014 for an amount of Rs. 1,89,15,549/- issued by the Government of India, Ministry of Finance, Central Board of Customs and Excise. 11. However, as the Petitioner was not granted any interest against this refund amount, the Petitioner filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals), after considering the statutory provisions and more particularly Section 27A, as well as the case law relied upon by the Petitioner, opined that as per the aforesaid section, the Petitioner was eligible for interest on delayed refund. However, the Refunding Authority had nowhere in the entire order discussed the ....
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....h April, 2003 and a copy of the Essentiality Certificate dated 13th March, 2003. He submitted that even though the Petitioner would be entitled to interest from the expiry of 3 months from 4th April, 2003, the Petitioner is restricting its claim for interest from the expiry of 3 months from 20th June, 2011 till 11th July, 2014 (i.e. the date when the payment of refund was made to the Petitioner). Mr. Shah submitted that the finding of the Refunding Authority that the refund claim was complete in all respects for sanctioning the refund only after the Petitioner had submitted all essential documents at the personal hearing held on 12th May, 2014, is wholly perverse and does not find any support even from the provisions of Section 27A. He submitted that the Refunding Authority by its order dated 13th December, 2011 (page 67 of the paper book) rejected the refund application of the Petitioner on merits and not on the ground that the same was incomplete. He submitted that this is ex-facie apparent from the operative part of the order (and which is reproduced by us earlier). For all the aforesaid reasons, Mr Shah submitted that the impugned order is liable to the quashed and set aside an....
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....t Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest. This section further stipulates that the application shall be accompanied by such documentary or other evidence as the applicant may furnish to establish that the amount of duty or interest in relation to which such refund is claimed was collected from, or paid by him, and the incidence of such duty or interest, has not been passed on by him to any other person. Thereafter, Section 27A deals with interest on delayed refunds. This section was brought on the Statute Book with effect from 26 May, 1995 and reads as under:- "27-A. Interest on delayed refunds.-If any duty ordered to be refunded under sub-section (2) of Section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent and not exceeding thirty per cent per annum as is for the time being fixed by the Central Government, by notification in the Official Gazette on such duty from the date immediately after the expiry of three m....
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....a. (2011) 10 SCC 292 : 2011 (273) E . L. T. 3 (SC) The Supreme Court, after noting the provisions of section 11B and 11BB of the Central Excise Act, 1944 (and which are almost identical and pari materia to sections 27 and 27A of the Customs Act, 1962) [in the SCC Report], held as under:- "12. It is manifest from the afore-extracted provisions that Section 11-BB of the Act comes into play only after an order for refund has been made under Section 11-B of the Act. Section 11-BB of the Act lays down that in case any duty paid 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 11-B 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 the proviso to Section 11-BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise but by an appellate authority or the court, then for the pu....
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....at wherever the refund/rebate claim is sanctioned beyond the prescribed period of three months of filing of the claim, the interest thereon shall be paid to the applicant at the notified rate. The Board has been receiving a large number of representations from the claimants to say that interest due to them on sanction of refund/rebate claims beyond a period of three months has not been granted by Central excise formations. On perusal of the reports received from field formations on such representations, it has been observed that in majority of the cases, no reason is cited. Wherever reasons are given, these are found to be very vague and unconvincing. In one case of consequential refund, the jurisdictional Central Excise Officers had taken the view that since the Tribunal had in its order not directed for payment of interest, no interest needs to be paid. 2. In this connection, the Board would like to stress that the provisions of Section 11-BB of the Central Excise Act, 1944 are attracted automatically for any refund sanctioned beyond a period of three months. The jurisdictional Central Excise Officers are not required to wait for instructions from any superior officers or to lo....
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....June, 2011) was rejected by the Refunding Authority by its order dated 13th December, 2011 (Exh "L" page 67 of the paper book). What is important to note is that the rejection of refund was not on the ground that it was incomplete or that all the relevant documents were not submitted by the Petitioner. The operative part of the order (and which has been set out earlier), in fact states that the Petitioner had "fulfilled the conditions of Notification 21/2002 dated 1.3.2002, Sr. No. 214 of Table, List 12, Condition 29, by submitting the Essentiality Certificate." The Refunding Authority, however, held that the Essentiality Certificate was issued subject to the condition that the left over items are subject to Re-export by 30th April, 2004. Examining the records, the Refunding Authority came to a finding that some of the goods were exported beyond the expiry date of 30th April, 2004 and in view thereof, the Refunding Authority found that the Petitioner had not complied with the conditions of the Essentiality Certificate. It therefore held that the Essentiality Certificate could not be taken to be the basis of the refund and accordingly rejected the refund application of the Petitione....
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....e ground that it is incomplete. As mentioned earlier, initially when the Refund Application was rejected by the Refunding Authority, (by its order dated 13th December, 2011), it was not the case of the Refunding Authority that all the essential documents were not supplied by the Petitioner along with the refund application. The said refund application was rejected on the ground that the Petitioner had not complied with the conditions set out in the Essentiality Certificate. Hence the refund application was rejected on merits. This being the position, we are unable to accept the arguments of Mr Jetly that the refund application filed by the Petitioner was complete in all respects only in May 2014. 22. In light of these facts, and having rejected Mr. Jetly's argument, we have no hesitation in setting aside the impugned order dated 29 April, 2016 and holding that the Petitioner would be entitled to interest on the sum of Rs. 1,89,15,549/- from the date immediately after expiry of three months from 20th June, 2011 till 11th July, 2014 (being the date when the refund was actually paid to the Petitioner). For the limited purpose of calculating and paying this interest, the matter is rem....