VBC INDUSTRIES LTD. Vs. COMMISSIONER OF CUSTOMS, CHENNAI

JUDGEMENT

(1.) THE relevant facts for deciding this appeal are as follows :

(2.) THE appellants imported capital goods under EPCG Scheme on concessional rate of duty vide Notification No. 160/92 -Cus., dated 20 -4 -1992. Due to non -fulfilment of export obligation, the appellant had to comply with the terms of the bond executed with the DGFT. They also paid an amount of Rs. 2,01,89,214/ - to Chennai Customs House towards interest on 3 -10 -2000. Later, CEGAT, Bangalore held that the liability of payment of interest @ 24% is not sustainable since Notification No. 160/92 -Cus. does not contain a condition to that effect. Therefore, the appellant filed a refund claim along with applicable interest as per law. The Deputy Commissioner (Refunds) sanctioned the amount collected as interest under Section 27 of the Customs Act, 1962. While sanctioning the amount, he has also ordered adjustment of the same against the outstanding sum due from the claimant. However, the Deputy Commissioner, in his order, is silent on the interest demanded on the refund amount. The Commissioner of -Customs (Appeals), in her order dated 31 -3 -2004, while setting aside the adjustment of the refund towards dues from the claimant, refrained from considering the partys appeal on interest on the ground that the Deputy Commissioner has neither discussed nor passed any order in this regard. According to her, a decision not taken or order not passed cannot be treated as order or decision in terms of Section 128 of the Customs Act, 1962. The appellants strongly challenged the findings of the Commissioner of Customs (A). [16] 2.Shri K.S. Ravi Shankar, the learned Advocate appeared on behalf of the appellants and Shri L. Narasimha Murthy, the learned SDR appeared on behalf of Revenue.

(3.) THE learned Advocate, citing a plethora of case laws urged that the department is duty bound to pay interest on the amount collected illegally from the appellants.