TaxTMI 
TaxTMI 
2025 (7) TMI 422
X X X X Extracts X X X X
X X X X Extracts X X X X
....with interest in terms of Section 27 A of the Customs Act, 1962, and that the issue before the Hon'ble Tribunal was limited to grant of interest from 02.08.1999? (ii) Whether the Customs Department had acted without jurisdiction by disallowing the claim of EPCG benefit in terms of Notification No.28/97- Cus dated 01.04.1997 and consequently, whether the appellant is entitled to interest from the date of payment of duty as a compensatory measure in terms of the decision of the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. V. Commissioner of Income tax, Pune, reported in 2006 (196) ELT 257 (SC)? 3.We have heard the detailed submissions of Mr.Hari Radhakrishnan for the appellant and Mr.Rajnish Pathiyil learned Senior Standing Counsel for the respondents. 4.The appellant is a hotel and had imported light and light fittings on 25.05.1999, vide Bill of Entry No.15041. It had applied for, and had been issued a license under the Export Promotion Capital Goods (EPCG) Scheme, claiming benefit of reduced rate of import duty in terms of Notification No.28/97-Cus dated 01.04.1997. A copy of the license has been furnished and indicates in the Annexure, that the go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eferring, inter alia, to Notification Nos.122/93, 28/97 & 29/97. 7. The above order was confirmed in first appeal by order dated 22.07.1999, as against which the Appellant approached the CESTAT. The CESTAT, vide order dated 22.01.2004, remanded the matter to the file of the original authority for re-consideration in the light of Customs Circular No.62/2002, dated 26.09.2002, issued by the Central Board of Excise & Customs, New Delhi (in short 'CBEC') that made reference to imports by a five star hotel. 8. On 15.12.2015, the Appellant had made an application on for refund of the duty remitted under protest, claiming interest thereupon from the date of remittance. The refund came to be granted on 20.07.2018. The matter was taken up for proceedings denovo post remand by the Tribunal, and, on 02.08.2004, the authority reiterated the conclusion under original order dated 08.07.1999 finding that the 2000 Circular did not come to the rescue of the Appellant. 9. In appeal for the second time before the Commissioner (Appeals), the Appellant was unsuccessful as its appeal was rejected on 22.03.2005 as against which it further appealed to the CESTAT, which finally, allowed the appeal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al came to be allowed on 20.07.2018 with consequential relief. 12.The discussion in the order of the Tribunal in the case of Appu Hotels is as follows: 'This appeal filed by the assessee is against denial of the benefit of Customs Notifications No. 28/97 and No. 29/97 both dated 1-4-1997 (EPCG scheme) by the lower authorities in respect of 'chandeliers and light fittings' imported by the assessee. After examining the records and hearing both sides, we note that, admittedly, the above items were covered by the EPCG licences whereunder they were imported. The denial of the benefit is on the ground that the items are not covered by the definition of "capital goods" given in the Notifications. We find that, under the above Notifications, service providers such as hoteliers like the appellants were eligible to import capital goods at concessional rate of duty under the EPCG scheme. In respect of Notification No. 28/97, "capital goods" means any plant, machinery, equipment and accessories required for (a)....... (b)....... (c) rendering services (vide Explanation to the Notification) In respect of the other Notification, "capital go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gned orders of the Tribunal submitting that the Customs Act does not provide for the grant of interest on interest. The appellant in the present case has filed an application for refund on 16.12.2015 and the refund was granted on 20.07.2018. The provisions of Section 27A provide for statutory interest/interest on delayed refunds, in cases where the refund has not been granted within a period of 90 days from date of refund application. This component of interest has been granted. 16. The statutory scheme supports the grant of interest only in cases where refund is delayed beyond a period of 90 days from date of application, and the Appellant is admittedly in receipt of such statutory interest. Thus, the Appellant can derive no further benefit of interest from the statute itself. The present claim however, is for compensation over and above statutory interest. 17. The question that would thus arise is whether commercial principles can be called in aid, and in this regard, useful reference may be made to the judgments of the Supreme Court in the case of Sandvik Asia Ltd Vs. Commissioner of Income Tax - I, Pune [2006 (196) ELT 257 (SC)] and Commissioner of Income Tax, Gujarat Vs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isrepresentation of facts would have resulted in withdrawal/cancellation of the license. Since that had not transpired, the Court held that the Customs authorities had erred in proceedings to take a stand opposed to the stand of the DGFT and DG (Tourism). 24.We feel that the case of the present appellant stands on a better footing than the case of Titan Medical Systems Pvt.Ltd. (supra). The licencing authority, when considering the grant of license, has accepted the factual position in regard to the classification of lightings, fixtures and fittings, technical light fitting, special effects light and lumas goods as 'capital goods'. This is in 1999. It is an admitted position that the license had not been withdrawn or reversed by the authority. 25. In order to obviate instances where officers of the Customs Department take stands at variance with the DGFT, the CBEC has issued a Circular in 2002 (26.09.2022) making it clear that such divergent views should not be taken and that when duty reduction or exemption had been granted by the DGFT or DG(Tourism), the Customs Department will align with such stand. The aforesaid Circular of the Board is binding upon the officers of all Co....