No Interest Payable on Refunds Issued within 3 Months as per Section 18(4) of Customs Act : CESTAT [Read Order]

In a recent ruling, the Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that the appellant is not entitled to the interest on refunds as they were issued within 3 months under Section 18(4) of the Customs Act, 1962.

The appellant imported 100% nylon yarn in raw white under 23 bills of entry between August 2013 and September 2014. The goods were provisionally assessed due to verification by the department regarding description, value, and eligibility for countervailing duty under Notification No. 30/2004-CE. The final assessment was completed on 28-02-2017, accepting the declared details. The appellant then filed a refund claim of Rs. 46,50,912/- paid as 20% deposits under PDA Regulation, 2011, and also requested interest on 19.06.2017. The original authority sanctioned the refund on 19.06.2017. The appellant did not get the interest.

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The counsel on behalf the assessee contended that the appellant is entitled to interest on the refund amount which was paid during the investigation or during adjudication proceedings.

The bench by relying on the case of M/s Saraswati Knitwear Pvt Ltd vs. CC, Ludhiana, in which the Tribunal held that the appellant-assessee is not entitled to interest on refund if the assessment is finalized within three months as prescribed under Section 18(4) of the Customs Act, 1962, and thus held that the appellant was not entitled to interest in the refund, as it was granted within 3 months as prescribed under Section 18 (4) of the Customs Act.

The CESTAT, comprising Mr. S. S. Garg ( Judicial Member ) dismissed the appeal filed by the assessee as it did not find any infirmity in the impugned order.

To Read the full text of the Order CLICK HERE

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