The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) directed a 6% annual interest under Section 129E of the Customs Act on the refund of duty for export iron ore fines.
The appellant/assessee Bagadiya Brothers Pvt Ltd exported iron ore fines which are subject to export duty at Rs.300 per MT. However, if the Fe content of the iron ore fines is below 62% they are exempted from export duty in excess of Rs.50 per MT by Notification No. 62/2007-Cus dated 03.05.2007. In other words, if the Fe content is above 62%, export duty has to be paid at Rs.300 per MT and if it is below 62%, it has to be paid at Rs.50 per MT. The exporter filed a shipping bill dated 31.05.2008 claiming the Fe content to be less than 62%. It also enclosed with it a test report from a private testing laboratory viz., Therapeutics Chemical Research Corporation (TCRC) dated 30.05.2008 which indicated the Fe content as 61.03%.
The shipping bill was assessed provisionally by the assessing officer, subject to execution of a test bond. The conditions of the bond were that the exporter would abide by the test report of the Central Revenue Control Laboratories (CRCL) and if the Fe content was above 62% it would pay the differential export duty. Samples were drawn and sent for testing to the Central Revenue Control Laboratories, which sent the test report dated 25.07.2008 stating that the Fe content is 61.15% by weight.
Mr. Hari Radha Krishna representing the assessee urged that reliance by the Commissioner (Appeals) on the ruling of Andhra Pradesh High Court in Maithan Ceramics Ltd (supra) is misplaced as in the said ruling, although the High Court had considered the ruling of Apex Court in Sandvik Asia Ltd, it did not follow the same, observing that Maithan Ceramics had deposited duty and penalty after the adjudication as Pre-deposit for Appeal during 2005-06 and at that material point of time, there was no statutory provision in the Customs Act, with regard to interest on refund of such deposit. It was only by Act 18 of 2008, Sec 129EE providing for refund of pre-deposit with interest was introduced into the Customs Act.
Thus, as the facts in the matter of Maithan Ceramics Ltd have been found different, which was considered by Andhra Pradesh High Court, the said ruling is not applicable in the facts of the instant case, particularly, as the deposit was made during the investigation stage in the year 2009.
The bench found that the issue in this appeal is squarely covered by the precedent order of this Tribunal (Allahabad Bench) in the case of Parle Agro Ltd wherein also, the amount paid during investigation, subsequently found to be refundable pursuant to adjudication/ appellate order, was held to be amount deposited by way of revenue deposit.
The two member bench of the tribunal comprising Anil Coudhary ( Judicial member) and A.K Jyotishi ( Technical member) allowed the appeal of assessee modifying the impugned order, directing to grant interest @6% per annum from the date of deposit till the date of refund. So far the appeal of Revenue is concerned, there being no merits, and CESTAT dismissed the same.
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