M/S. Riso India Pvt. Ltd vs C.C. New Delhi (Import & General)

[Arising out of Order-in-Original No.CC(A)Cus./439/2012 dated 16.10.2012 by the Commissioner of Customs (Appeals), New Delhi].

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Riso India Pvt. Ltd. .Appellants

Vs.

C.C. New Delhi (Import & General) .Respondent

Appearance:

Shri Kamal Agarwal, Advocate for the Appellants

Shri. D. Singh, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 21.01.2015

FINAL ORDER NO.50261/2015-CU(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order to interest on delayed refund.

2. The facts of the case are that on 02.03.2010 the applicant has filed a refund claim on SAD paid by them under notification no.102/2007. The refund application was rejected on 18.06.2010 holding that refund claim is barred by limitation. The said order was challenged before the Ld. Commissioner (A) and on 04.01.2011. The commissioner (A) remanded matter back to the assistant Commissioner to reconsider the matter. Thereafter, refund claim was sanctioned to the appellant. The appellant sought interest after three months from the date of filing of refund claim a, till the refund claim was sanctioned. The said claim of interest was rejected by the Assistant Commissioner on 30.03.2012 holding that there is no provision to pay interest on delay refund filed under notification no.102/2007. On appeal before the Ld. Commissioner (A), the refund claim was rejected holding that the appellant has not claimed any interest in their claim of refund. Further the refund under notification no.102/2007 is not governed under section 27 of the Customs Act, 1962. Aggrieved from the said order appellant is before me.

3. The Ld. Consultant appearing on behalf of the appellant submits that issue is squarely covered by the decision of Honble High Court of Madras in the case of KSJ Metal Impex (P) Ltd. Vs. Under Secretary (CUS)-2013 (294) E.L.T. 211 (Mad). He also relied on the decision of this Tribunal in the case of Hero Motors Ltd. Vs. C.C.E Ghaziabad-2014-TIOL-574-CESTAT-DEL to say that if appellant has foregone their claim of interest, that cannot be reason deny interest.

4. On the other hand Ld. AR reiterated findings of the impugned order and submits that appellant is not entitled to claim interest.

5. Heard the parties. Considered the submission.

6. In the case of KSJ Metal Impex Pvt Ltd. (Supra) the issue came up before the Honble High Court whether the assessee can claim interest on delay refund under notification 102/2007. The Honble High Court observed in para 10,11 &12 as under:

10. On going through paragraph 4.3 of the circular, it is evident that the Board is of the view that there is no specific provision for payment of interest in the Notification No.102/2007-Customs, dated 14.09.2007. That reason is not correct as the grant of exemption under section 25(1) of the Customs Act, 1962 is one facet. The claim for refund is contingent on complying with the requirement as specified in the notification. The exemption from payment of special additional duty as payable under Section 3(5) of the Customs Tariff Act, 1975 is exempted under Section 25(1) of the Customs Act, 1962. Therefore the refund of duty paid will have to be read in terms of Section 3(8) of the Customs Tariff Act, 1975 and not otherwise. Therefore, the provision that is applicable for refund is Section 27 of the Customs Act, 1962. If the refund is not made as specified, then the consequences will follow with regard to interest.

11. Furthermore, the grant of exemption under Section 25(1) of the Customs Act, 1962 is an independent exercise of power by the Central Government and certain conditions have been imposed in the said notification for seeking refund, but the procedure for refund, as has already been highlighted, will fall under Section 27 of the Customs Act, 1962 as made applicable under Section 3(8) of the Customs Tariff Act, 1975. A conjoint reading of these two provisions makes it clear that the refund application should be filed and entertained only under Section 27 of the Customs Act, 1962 and there is no method or manner prescribed under Section 25 of the Customs Act, 1962 to file an application for refund of duty or interest. To sate that no interest on delayed payment is contemplated in the notification issued under Section 25 of the Customs Act, 1962 is a misconception of the provision of the Customs Act, 1962.

12. When Section 27 of the Customs Act, 1962 provides for refund of duty and section 27A of the Customs Act, 1962 provides for interest on delayed refunds, the authority cannot override the said provisions by a circular and deny the right which is granted by the provisions of the Customs Act, 1962 and Customs Tariff Act, 1975. Therefore, paragraph 4.3 of the Circular No.6/2008-Customs, dated 28.04.2008 is contrary to the statute and becomes totally inappropriate. When the circular is contrary to the provisions of the Customs Act, 1962 and Customs Tariff Act 1975, it has to be struck down as bad.

7. Further I find that in the case of Hero motors Ltd. this Tribunal has observed in para 7 as under:

In fact, the applicability of Section 11BB is not even denied by the Department. The Department, however, seeks to deny the interest on the basis of the letters given by the appellant to the Jurisdictional Assistant Commissioner giving up their claims for interest for the period of delay. The decision of the Commissioner (A) is absolutely incorrect and contrary to the law laid down by the Apex Court in the case of Dunlop India Ltd & Madras Rubber Factory Vs. Union of India wherein in para 40 of the judgment, the Apex Court has held that there is no estoppels in law against an assessee taxation matters. Besides this, we also find that the Apex court in case of Union of India Vs. Madhumilan Syntex Ltd. reported in 2007 (195) E.L.T. 141 (SC) has held that right conferred under the statute cannot be given up on the basis of concession made by any party to the lis. In our view the ratio of the above judgments of the Apex Court are squarely applicable to the facts of this case. Therefore, just because the appellant by the letters addressed to the Jurisdictional Assistant Commissioner had given up their claim for interest on the amount of refund for the period of delay in sanction of the refund claims, they would not be estoppels from challenging the denial of interest and claiming the same when they are entitled for the same under the statutory provisions of Section 11BB. The impugned order is set aside and the Department is directed to pay the interest in terms of the provisions of Section 11BB. The appeals filed by the appellant are accordingly allowed.

8. As the Honble High Court of Madras has held that provisions of claiming interest are applicable for the refunds pertaining to notification no.102/2007 in the case of KSJ Metal Impex (P) Ltd. (Supra). I hold that appellant is entitled to claim interest for delayed refund after three months from the date of filing of their refund till the realization of the refund claim.

9. With these terms impugned order is set aside. Appeal is allowed with consequential relief if any.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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C/4014/2012-CU(SM)