In the case of Videocon Industries, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the interest of refund is allowable even if refund was granted after 3 months from date of Commissioner’s order. As per Section 27A of the Customs Act, 1962,an assessee is entitled for the refund if the same is not refunded within three months from the date of receipt of application under sub section (1) of Section 27 of the act.
Videocon Industries Ltd, the appellant challenged the order in appeal whereby the Commissioner (Appeals) rejected the claim of interest on refund already sanctioned to the appellant on the ground that the appellant was granted the refund within three months from the order dated 13.04.2012 passed by Commissioner (Appeals) allowing the refund therefore, no interest is payable.
As per department’s insistence the appellant had paid the anti-dumping duty subsequently, they have challenged the imposition of anti-dumping duty wherein they succeeded vide CEGAT order dated 15.11.2002. Thereafter, the appellant filed an application for refund on 22.04.2003 in respect of anti- dumping duty along with interest paid by the appellant. By the adjudication order dated 05.11.2003 though the refund was sanctioned but the same was credited into consumer welfare fund on the ground of unjust enrichment.
The appellant being aggrieved by the adjudication order filed writ petition before the High Court of Gujarat. Based on the direction of High Court of Gujarat to file an appeal before Commissioner (Appeals) , the appellant filed appeal before Commissioner (Appeals) which was allowed by Commissioner (Appeals).
The appellant filed a revised claim with interest on refund. The Adjudicating Authority though granted the refund of amount paid by the appellant but rejected the claim of interest on such refund on the ground that there is no specific order about interest by the Commissioner (Appeals).
The Commissioner (Appeal) vide impugned order rejected the claim of interest on the ground that refund was granted within 3 months from the Commissioner (Appeals) order dated 13.04.2012. Therefore, no interest is payable to the appellant.
Shri Sushil Jethmalani with Ms. Aaksha Sajnani, appearing for the appellant submitted that as per Section 27 A the interest is payable after 3 months from the date of initial application filed for refund. In the present case the refund application was filed on 22.04.2003 however the refund was sanctioned and granted to the appellant on 25.06.201. Shri Anoop Kumar Mudvel, Superintendent (AR) appearing on behalf of the Revenue reiterated the finding of the impugned order.
It was evident that the Commissioner (Appeals) rejected the claim of interest on refund referring the provision of Section 27 A of Customs Act, 1962 on the ground that the refund was payable within three months from the order dated 13.04.2012 of Commissioner (Appeals) whereby the refund was allowed. As per Section 27A ,the assessee is entitled for the refund if the same is not refunded within three months from the date of receipt of application under sub section (1) of Section 27.
In light of the judgements, the two member bench comprising Mr. Ramesh Nair, Member (Judicial) and Mr. C L Mahar, Member (Technical) held that “the appellant is legally entitled for interest on the refund granted to them after three months from the date of the application i.e. 22.07.2003 till the grant of refund i.e. 25.06.2012 as per the rate of interest as prescribed under the Customs Act, 1962.” The CESTAT set aside the impugned order and allowed the appeal.
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