The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi bench has allowed 12% Interest on delay in processing refund of pre-deposit.
The appellant, M/s Leather Sellers is a manufacturer-exporter of leather goods. They had re-imported a consignment of goods, which were earlier exported for repair etc., and thereafter, re-export. For the re-import, the appellant had filed a Bill of Entry with the undertaking to re-export within six months as per Notification No. 158/95-Cus and also submitted a re-export bond and also Bank Guarantee for Rs. 3,10,000/-.
After the re-export, they applied for the release of their bond and Bank Guarantee but the revenue proceeded to encash the Bank Guarantee by issuing an invocation letter, and subsequently, passed the order of adjudication against the appellant, holding that the appellant had failed to comply with the condition of re-export, and the Bank Guarantee was appropriated, holding failure to export within six months. The issue was reached before the Tribunal, which held in favor of the appellant.
The appellant approached the department for the grant of refund along with interest under the order of the Tribunal but the application was rejected by the Assistant Commissioner. Being aggrieved, the appellant preferred to appeal before the Commissioner (Appeals). The Commissioner (Appeals) allows the refund of the Bank Guarantee alone without interest. The aggrieved appellant filed an appeal before the Tribunal.
The Coram of Mr. Anil Choudhary, Member (Judicial) by relying on the decision of Tribunal in Parle Agro Ltd. has held that “I hold that the amount was lying in the nature of the pre-deposit with the department from the date of encashment of the Bank Guarantee. Accordingly, I hold that the appellant is entitled to interest from the date of encashment of Bank Guarantee, i.e., 21/07/2006 to 22/07/2019 under Section 129EE of the Customs Act @ of 12% P.A”.
Mr. Ashish Kumar Shukla, Advocate appeared on behalf of the appellant, and Ms. Tamanna Alam appeared on behalf of the Respondent.
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