Delhi HC Directs Refund of ₹15 Lakh With 4% Interest as Re-Credit Not Permissible Under Abolished Scheme [Read Order]

CMR Green Technologies Limited,petitioner-assessee,had imported 197 consignments of aluminium scrap from different countries and presented them for clearance before the AssessingOfficer (AO). The AO rejected the declared transaction value and reassessed the goods, leading to collection of higher duty.

The petitioner claimed the duty was excess and approached the Principal Commissioner (Appeals), who set aside the reassessment and accepted the original value. This resulted in a refund of ₹8,75,22,009.

As per the refund order dated 13th September 2019, ₹8,60,21,916 was paid to the petitioner through RTGS, while ₹15,00,093 was re-credited to the petitioner’s license. The petitioner challenged this re-credit and sought full payment in cash.

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However, the appeal against the refund order was dismissed by the Commissioner (Appeals) on 17th June 2021 due to a delay of 559 days in filing. While another appeal related to a different order was partly allowed, the refund-related appeal was rejected as time-barred.

The second appeal before Customs,Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh also failed. The tribunal noted that the delay was beyond the extendable limit and held that the appeal could not be entertained. The claim remained unresolved solely due to the delay in filing.

The Court noted that the order was passed on 13th September 2019, and the appeal should have been filed by 12th December 2019. Since it was filed late without a valid reason, the appeal was dismissed, and this was upheld by CESTAT.

The petitioner counsel stated that the re-credit scheme had been abolished through a public notice dated 18th April 2013 and was not in effect when the refund order was passed. Hence, the direction to re-credit the amount to the licence was not valid, and the department continued to hold the amount.

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The respondent counsel, argued that the delay in filing the appeal was due to the petitioner, and the authorities had no power to condone such a delay.

Justice Prathiba M.Singh and Justice Rajneesh Kumar Gupta re-credited the petitioner’s licence or paid directly. Since the re-credit scheme was not in place when the order was passed on 13th September 2019, the Court held that the amount could not have been re-credited. It found that the department continued to hold the amount without justification, which amounted to unjust enrichment.

The court held that the amount could not have been re-credited to the petitioner’s licence since the scheme had already been abolished. It directed the respondents to refund the amount with simple interest at 4% per annum within three months, considering the petitioner had also delayed in filing the appeal.

Accordingly,the petition was disposed of.

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