VIJAYA ENTERPRISES Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) BEING aggrieved with the order passed by the Commissioner (Appeals), Revenue has preferred the present appeal. I have heard the learned SDR Shri Sameer Chitkara and Shri P.K. Saraswat, Proprietor appearing for the respondent -firm.

(2.) THE facts, in brief, are that at the time of import and clearance of steel items, appellant paid duty of Rs. 17,36,312/ - and entered into 3 Bank Guarantees totally amounting to Rs. 8,82,720/ -. On adjudication, the duty was confirmed to the tune of Rs. 19,26,296/ - along with imposition of personal penalty of Rs. 2 lakhs on the respondent and Rs. 50,000/ - on the partner of the firm. When the matter travelled to the Tribunal, Tribunal directed the respondent to deposit entire differential duty of Rs. 1,89,984/ - within a period of 10 weeks and granted waiver of pre -deposit of penalty. However, before passing of the stay order, Revenue had already invoked bank guarantee of Rs. 6,08,220/ - that is in excess of amount of differential duty, as determined by the original adjudicating authority. The appellant filed an application for refund of excess amount which was encashed by the department. Ultimately their appeal was disposed off by the Tribunal confirming differential duty of Rs. 1,89,984/ - and upholding personal penalty of Rs. 50,000/ - upon the partner. Personal penalty on the respondent was set aside. As such, the respondent became entitled to refund of the excess amount so encashed by the Revenue, which after adjusting the duty amount and personal penalty of Rs. 50,000/ - on the partner, came to be Rs. 3,68,236/ -. The said claim was sanctioned by the Assistant Commissioner on 21 -3 -06.

(3.) THE dispute in the present appeal is as regards the interest on the delayed payment of refund. The appellate authority has allowed the interest on the said amount on a part amount for the period within 3 months from the date of the Finance Act, 1995 came into existence. Revenues contention is that the amount so encashed by the department was towards penalty and not towards the duty, in which case, the interest provisions of Section 11BB will not get attracted. The provisions of Section 11BB provides for interest in respect of duty refunded.