COMMISSIONER OF CUSTOMS, MANGALORE Vs. STEEL COMPLEX LTD.

JUDGEMENT

(1.) THIS Appeal is by the Revenue being aggrieved by the order of the Customs, Excise & Service Tax Appellate Tribunal (hereinafter called as CESTAT) in CESTAT Final Order No. 1958/2006, dated 23 -11 -2006 [2007 (210) E.L.T. 403 (Tribunal)] wherein the Tribunal while setting aside the order passed by original authority and the appellate authority has held that the respondent is entitled to interest as per the Notification issued by the Government three months immediately after coming into force of the Amendment Act introducing Section 27A up to 10 -1 -2001 when the refund was made. There is a proceeding regarding refund claim of Rs. 2,46,606/ - which was rejected by the original order and order -in -Appeal No, 114/2004 passed by the Collector of Appeals wherein, by the order -in -original dated 19 -4 -1995 considering his claim for refund was rejected. Being aggrieved by the same, an appeal came to be preferred before the CESTAT in Appeal No. 49/1996 and the CESTAT by the order dated 9 -4 -1999 allowed the appeal and held that the denial of the refund claim under Section 23 of the Customs Act to the appellant was not legally correct and set aside the order -in -appeal impugned and the attendant order -in -original and allowed the appeal with consequential relief as per law. Though the order was passed on 9 -4 -1999 the refund was not made up -to 10 -1 -2001 and wherefore an application was filed under Section 23 of the Customs Act seeking interest on the belated refund of the amount to which the respondent was entitled to. The said claim was rejected by the order -in -original dated 13 -12 -2001 passed by the Assistant Commissioner of Customs and was affirmed in Appeal No. 114/2004 on the file of the Commissioner of Customs (Appeals). Being aggrieved by the same, an appeal was preferred before the CESTAT in Customs 2/2005 and the CESTAT by the order dated 6 -12 -2006 held that in view of the provisions of Section 27A regarding interest to be paid on the belated refunds and in view of the admitted fact that there was delay in refund of the claim by the respondent after the order was passed on 9 -4 -1999 and as the refund was made on 10 -1 -2001, in view of the provisions of Section 27(2) the Tribunal held that since in view of the provisions of Section 27A interest would be payable from three months after the amendment came into force and therefore the rejection of the claim for interest on the belated refund is not justified and held that the respondent is entitled to interest as per the Notification issued by the Government on the belated payment of refund amount immediately after three months from the date of the Presidential Assent and the Amendment Act, 1995, till 10 -1 -2001 that the claim of the respondent was refunded as per the order of the CESTAT dated 9 -4 -1999. Being aggrieved by the said order passed by the CESTAT this appeal has been filed which has been admitted for consideration of the following questions of law: - Whether it is correct on the part of the Tribunal to direct Department to grant interest without following the provisions of Sec. 27(1), 27(2) and 27A of Customs Act 1962 and provisions of Customs Refund Application(Form) Regulations, 1995? We have heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondent. The learned counsel appearing for the appellant submitted that the CESTAT was not justified in holding that in view of the provisions of Section 27A the respondent is entitled to interest immediately after three months from the date of Presidential Assent on 1995 Amendment Act up -to the date of the refund, that is 10 -1 -2001. He also submitted that the claim had not been made in accordance with law by producing all the original documents showing the deposit of the amount and therefore no interest can be claimed by the respondent.

(2.) THE learned counsel appearing for the respondent submitted that admittedly by the order dated 9 -4 -1999 the claim of the respondent for refund was allowed and the amount has been refunded but there is delay in making the payment of the claim for refund of the amount and therefore under Section 27A the respondent is entitled to interest for the belated payment of the claim for refund and therefore the order passed by the Tribunal is justified.

(3.) THE material on record would show that the fact the claim for refund of Rs. 2,46,606/ - which had been disallowed by the original authority and the appellate authority has been set aside and the claim for refund was allowed by the CESTAT by order dated 9 -4 -1999. It is also not in dispute that though the refund order was passed on 9 -4 -1999, the refund has been made up -to 10 -1 -2001. It is clear from the order passed by the CESTAT dated 9 -4 -1999 that the appellant therein who is the respondent herein is entitled to all the consequential reliefs as per law. Section 27A has been introduced by the Amendment Act, 1995 with effect from 26 -5 -1995 and therefore the claim for payment of interest on the delayed refund as per the order passed by the CESTAT dated 9 -4 -1999 cannot be denied to the respondent. The fact that the appellant was liable to refund a sum of Rs. 2,46,606/ - and the same has been refunded pursuant to the order passed by the CESTAT on 10 -1 -2001, it is not now open to the appellant to contend that no documents are produced to show that the amount was with the appellant and that the original documents were not produced regarding the amount which was to be refunded and therefore there is delay in making the refund of the amount as per the claim pursuant to the order of the CESTAT dated 9 -4 -1999. In view of Section 27A and explanation to 27A it is clear that having regard to the above stated facts of the case, the respondent would be entitled to interest only from 26 -5 -1995 to 10 -1 -2001 and the same has been granted at the rate as per the Notification issued by the Central Government and therefore we do not find any violation of the provisions of Section 27(1) or 27(2) and 27A of the Customs Act, 1962 and the provisions of Customs Refund Application (Form) Regulations, 1995, and accordingly the question of law is answered against the Revenue and in favour of the assessee. Accordingly, we pass the following order. The appeal is dismissed.