Custom, Excise & Service Tax Tribunal
Kolkata-Admn Airport vs M/S Tirumala Seven Hills Pvt. Ltd. on 4 September, 2025
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.2
Customs Appeal No. 75124 of 2025
(Arising out of Order-in-Appeal No. KOL/CUS/Airport/KS/231/2024 dated 09.04.2024
passed by Commissioner of Customs (Appeals), Kolkata.
Commissioner of Customs (Airport & Administration), Kolkata,
(15/1, Strand Road, Customs House, Kolkata-700001)
...Appellant
VERSUS
M/s Tirumala Seven Hills Pvt. Ltd.,
(22, No. 40, Strand Road, 3rd Floor, Suite-10, Kolkata-700001.)
.. ...Respondent
APPERANCE :
Shri S. Debnath, Authorized Representative for the Appellant
Shri R. N. Bandopadhyay & Rupsha Chaterjee, Advocates for the Respondent
CORAM:
HON'BLE MR. R. MURALIDHAR MEMBER (JUDICIAL)
HON'BLE MR. K ANPZHAKAN MEMBER (TECHNICAL)
Final Order No...77470/2025
DATE OF HEARING : 04.09.2025
DATE OF DECISION : 04.09.2025
PER R. Muralidhar:
The issue pertains to the classification and consequent eligibility or
otherwise of Customs Duty exemption. Being aggrieved by the impugned
order, vide which the Commissioner (Appeals) has overturned the
classification adopted by the Adjudicating authority, the Revenue is in
appeal.
2. The Ld. AR, appearing for the appellant Revenue, reiterates the
detailed Grounds of Appeal. He submits that the initial assessment and
classification of the goods under CTH 85176290 as per the Examination
Report of the assessing officer is correct and the Commissioner (Appeals)
erred in setting aside the same. Accordingly, he prays the present appeal
may be allowed.
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3. The Ld Advocate appearing on behalf of the Respondent importer,
makes the following submissions:
3.1 The Respondents have imported Optical Interface Modules (OIM)
and classified the same as CTH 85177090 [presently CTH 85177990]
and presented their Bill of Entry accordingly, seeking the exemption
granted under Notification 57/2017-Cus which grants BCD @ NIL on
inputs, parts, and sub-parts used in manufacture of goods under
heading 8517
3.2 The Examination report by assessing officer changed the declared CTH
from 85177090 to 85176290 where the BCD was enhanced from NIL to
20% In order to meet their requirement, the Respondent paid the Customs
Duty applicable for CTH 85176290 ‗Under Protest' and cleared the goods.
The importer also submitted the PD bond and Bank Guarantee and
released the goods and contested the issue.
3.3 On appeal, after going through the factual details and the statutory
provisions and the clarifications given by the CBIC, the Commissioner
(Appeals) vide the impugned Order-in-Appeal No. KOL/CUS/Aiport/KS/231/2024
was passed on 09.04.2024, accepted the respondent's submission that the goods in
question would be classifiable under CTH 8517090 [Presently CTH 8517990].
Accordingly, he allowed the appeal filed by the importer [present respondent].
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3.4 The Respondent relies on the letter dated 05.02.2021 received from
Assistant Commissioner of Customs, Post Clearance Audit, ACC informing
that "after due deliberation on the matter, this section has accepted
your contentions that Optical Interface Module/ Optical
Transceiver (SFP/XFP Module) are classifiable under CTH
85177090 as parts and the matter has been closed at this end".
[copy enclosed]
3.5 The letter also was annexed with an office memorandum dated
29.10.2019 issued by CBIC chairman.
3.6 This letter dated 05.02.2021, issued by the Department has not
been contested in any higher forum and that implies that the matter is
accepted by the Department, as is already clear from this letter.
3.7 The BG and Bank Guarantee was also released by the Department
which was submitted against Bill of Entry No. 9063059 dated
05.10.2020, the relevant Bill of Entry before the Hon'ble Tribunal.
3.8 It is submitted that prior to 05.10.2020 and after 05.02.2021 all
the bills of Entry filed for Optical Interface Modules (OIMs) has been
assessed by the assessing group under CTH 85177090 (Current CTH
85177990). Copies of the Bill of Entry enclosed. The Dept. has not
contested the CTH adopted therein.
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Customs Appeal No. 75124 of 2025
3.9 Reliance is placed CESTAT Final Order No. A/85426/2024 dated
22.04.2024 passed by Hon'ble CESTAT, Mumbai in the matter of IBM
India Pvt. Ltd. Vs. Commissioner of Customs (Import), Mumbai where
reliance has been placed on Tribunal Order in the matter of Reliance Jio
Infocom Ltd. & Others which has also been upheld by Hon'ble Supreme
Court which has ordered that the imported transceivers/SFP can also be
classified under CTI 8517 7090 extending the benefit of exemption under
Sl. No.5(a) of Notification No.57/2017-Customs dated 30.06.2017
3.10 Reliance is placed on Vodafone Idea Ltd. V/s Principal Commr. of
Cus, ACC,(import), New Delhi -- classification to be based on functional
role within parent equipment.
3.11 This present Bill of Entry has been submitted with CTH 85176290 as
per Departmental verbal order ―UNDER PROTEST‖. The protest letter has
been enclosed
4. In view of the foregoing, it is prayed that the appeal filed by the
Revenue may be dismissed.
5. It is further submitted that the assessment of Bill of Entry under CTH
85176290 is patently erroneous, as it gets confirmed by the letter dated
issued by the Dept. 05.02.2021, accepting the respondent's classification
of CTH 85177090. Therefore, the denial of the exemption of Customs Duty
@ NIL in terms of Notification NO.57/2017 is illegal. The respondent would
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be eligible for the refund excess Customs Duty alongwith interest from the
date of payment by the Appellant till the date on which the refund is
granted.
5. The respondents have paid the Customs Duty was paid ―under
protest‖.[Copy of the letter enclosed]
6. Though after the Order-in-Appeal No. KOL/CUS/Aiport/KS/231/2024 was
passed on 09.04.2024 the respondent approached for refund of the excess paid
Customs Duty, the same still stands unpaid on the pretext that the issue is pending
before the Tribunal. The Board's Circular No. 572/9/2001- Central Excise
22/02/2001 clearly states no refund/rebate claim should be withheld on the ground
that an appeal has been filed against the order giving the relief, unless stay order
has been obtained.
7. The Respondent would like to draw attention to the recent ruling
pronounced by Commissioner of Customs (Appeal), Kolkata in case of M/s
AHANA COMMERCE PVT. LTD. Vs ASSISTANT COMMISSIONER OF
CUSTOMS (ARS), KOLKATA [KOL/CUS(PORT) /KS/45/2025 dated
22.01.2025] involving similar facts where the interest payment has been
allowed from the date of payment till the date of refund.
8. Attention is invited to Order-in-Appeal No. KOL/CUS/PORT/
DC/262/2025 dated 16.07.2025 in the case of M/s RAHUL AGRO
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Customs Appeal No. 75124 of 2025
INDUSTRIES Vs ASSISTANT COMMISSIONER OF CUSTOMS (ARS),
KOLKATA.
9. Order passed by Hon'ble CESTAT, Allahabad in the matter of Parle
Agro Private Limited Vs. Commissioner of Central Excise, Noida
vide Final Order No. 70145/2017 dated 31.01.2017, is relied upon
to pray of interest of 12% for the refund to be granted to the
respondent.
10. Reliance placed upon Hon'ble High Court, Allahabad in the matter of
EBIZ. Com Pvt. Ltd. Vs Commissioner of Central Excise, Customs
and Service Tax and Ors reported in 2016 (9) TMI 1405.
11. The decision taken by Hon'ble CESTAT Allahabad in the matter of
Parle Agro Pvt. Ltd. Vs Commissioner, Central Goods & Service
Tax, Noida reported in 2021 (5) TMI 870. The Hon'ble Court in its
order has held inter-alia that:-
"39. In this connection reference can also made to the decisions
of the Allahabad High Court in Pace Marketing Specialties and
Ebiz. Com Private Limited, wherein after making reference to the
decision of the Supreme Court in Sandvik Asia Ltd., the High
Court granted interest at the rate of 12% per annum in matters
relating to refund of amount deposited during investigation and
adjudication.
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40. In Riba Textiles, the Tribunal also granted interest at the rate
of 12% on refund of amount deposited during investigation and at
the time of entertaining the stay application.
41. In view for the aforesaid decisions, and the fact that the rate
of interest varies from 6% to 18% in the aforesaid Notifications
issued under sections 11AA, 11BB, 11DD and 11AB of the Excise
Act, the grant of interest @12% per annum seems to be
appropriate.
42. Thus, for the reason stated above, Excise Appeal No. 70628 of
2019 is allowed and the order dated 28.05.2019, passed by the
Commissioner (Appeals) is modified to the extent that interest
shall be granted to the appellant @12% instead of @6% from the
date of deposit till the date of payment. Excise Appeal No. 70674
of 2019 filed by the Principal Commissioner for setting aside the
order dated 28.05.2019, passed by the Commissioner (Appeals) is
dismissed."
12. In view of the above submissions, it is prayed that the Revenue may
be directed to grant the Refund of the excess Customs Duty paid along
with interest of 12 % from the date of initial payment by the Respondent
till the same is paid to the appellant.
13. To summarize the Respondent's submissions:
(a) It may be held that the goods in question Optical Interface
Modules [OIM] may be held as classifiable under CTH
85177090 (Current CTH 85177990) and not under CTH
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85176290 as is being canvassed by the appellant Revenue. On
this ground the appeal filed by the Revenue may be dismissed.
(b) Considering the fact that the Dept. itself has held that the
classification adopted by the appellant under CTH 85177090 is
correct, as per the letter dated 05.02.2021 which relied on
Office memorandum dated 29.10.2019, the refund may be
granted along with interest from the date of payment of
Customs Duty till the same is paid to appellant.
(c) The Refund may be granted with interest of 12% as has been held
in the cited case laws.
14. Heard both the sides and perused the appeal papers and the other
documents placed before us.
15. We find that the issue on hand is to decide the correct classification
of Optical Interface Module (OIM). The respondent at the time of
import, has filed the Bill of Entry classifying the OIM under CTH
85177990 [erstwhile 85177090] claiming the exemption under Sl No.5
of Notification No.57/2017 Cus. However, the Revenue took the stand
the goods are classifiable under CTH 85176290 wherein no exemption
benefit was available. The assessment was completed under the CTH
85176290 and the respondent paid the Duty ‗Under Protest' in order to
meet their supply requirements. After this, they contested the
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classification before the Commissioner (Appeals), who vide the
impugned OIA has held that the goods are classifiable under CTH
85177990 only. At Para 10 he has given the following finding:
" I find that the opinion provided by the Ministry of Communications
Govt of India through the Assistant Director General (ADG) Dept of
Communications (DOT), supports the classification of OIMs as parts
/ components under CTH 85177090 (now CTH 85177990). The ADG
Dot explicitly states that OIMs are components mounted on PCBs
and should be classified as „other parts‟, emphasizing their role
within the broader telecom equipment context".
16. He further notes that the subsequent Bills of Entry Nos.3594305
and 3594304 dated 4.12.2022 and 09.11.2022 have been assessed by
the Dept under CTH 85177990.
17. Thus we find that the Commissioner (Appeals), in the impugned
Order has come to a considered conclusion based on the ADG's (DOT)
assertion about the exact nature of the OIMs.
18. We find that in the case of the respondents themselves the Asst
Commissioner of Customs - Post Clearance Audit -ACC - Kol 2 vide his
letter dated 5.2.2021, has stated that the Dept has accepted the
respondent's contention that the goods should be classifiable under CTH
85177090. The copy of this letter is reproduced below :
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Customs Appeal No. 75124 of 2025
19. Considering the detailed findings and the above letter issued by the
Assistant Commissioner Customs [Office of the Principal Commissioner
Customs Airport and ACC], we find that the Appeal filed by the Revenue
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has no merits whatsoever. They are precluded from arguing against the
accepted position of the Dept., which is again based on the clarification
given by the ADG (DOT).
20. Therefore, we dismiss the appeal filed by the Revenue.
21. Coming to the grievance of the respondent about refund of Customs
Duty along with interest, we find that it is on record that they have paid
the Customs Duty [which is not payable if the classification is taken as
CTH 85177090 / 85177990] ‗Under Protest'. The letter filed by them at
the time of filing their Bill of Entry is extracted below:
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22. Further, even the Commissioner (Appeals) in Para 6 of the OIA has
given the following findings :
"...........Since the imported goods were urgently required by the
appellant due to pre-market commitment, the appellant has paid the
applicable enhanced duty under protest‟.
23. From the above factual details discussed, we fail to understand as
to why in the first place, the Revenue took the stand that the OIM
should be classifiable under CTH 85176290 in the year 2022, which
goes against their own accepted position of the same as being
classifiable under CTH 85177090 as per their own letter dated
05.02.2021. This act of the Revenue has caused undue hardship to the
respondent, who had to shell out the Customs Duty in order to clear the
consignment which was not required to be paid at all. After this, they
were made to run from pillar to post. The Adjudicating authority passed
the order on 10.7.2023, after almost 10 months, upholding the CTH
85176290. The respondent had to approach the Commissioner
(Appeals), who vide the impugned OIA has done proper justification by
allowing their appeal. Unfortunately, against this order, the Revenue
has filed before the Tribunal, totally ignoring the findings of the
Commissioner (Appeals) about the clarification by ADG (DOT) and
acceptance of the same by the Revenue [vide letter dated 5.2.2021]
and the fact that subsequent clearances were being allowed under CTH
85177090.
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24. We find that even while changing the classification, no speaking
order was issued, for which the respondent was made to file their letter
seeking a Speaking order, as is evidenced by their letter extracted
below:
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25. This shows that no proper thought process was adopted nor proper
procedure was followed by Revenue, till the matter came to be decided
by the Commissioner (Appeals) vide the impugned OIA. All this while,
the illegally collected Customs Duty is simply retained by the Revenue
with audacity on the pretext that the appeal against the OIA is pending
before the Tribunal.
26. We do not appreciate the way Revenue has gone for litigation on
this issue, wherein there is not issue to be contested in the first place.
The Respondent cannot be put to financial burden for years together by
way of such litigations, where no cause whatsoever is available to the
Revenue
27. Now we take up the issue as to what should be the date of refund of
the Customs Duty ‗Paid Under Protest' by the Respondent and the
interest to be paid thereon.
28. Similar issue had come up before this Tribunal in the case of Z-
Konark Vs CCGST - BBSR in Service Tax Appeal No. 76497 of 2024 -
Final Order No.70513 dated 7.1.2025, wherein this Bench has held
as under:
11. In the case of Atmiya Engineering and Plastics Vs CCE & ST Vadodara,
vide FINAL ORDER NO. A/ 10311 /2022, has followed the Ranbaxy judgement
and has held as under:
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Customs Appeal No. 75124 of 2025
11. The Revenue‟s contention is that they have granted the refund within
three months form the date of Commissioner (Appeals) order. In this
regard, I am of the view that once the Commissioner (Appeals) has allowed
the refund, the appellant was entitled for the refund right from the date of
filing of the application. Therefore, for the purpose of interest, it is not the
date of Commissioner (Appeals) order, but it is the date of filing of refund
application needs to be taken.
12. In the case of Tengapani Tea Estate, M/s. Betjan Tea Estate Vs.
Commissioner of CGST & CX, Dibrugarh Commissionerate - 2021 (9) TMI 22,
this Bench has held as under :
"Since the claim for refund/exemption filed by the Appellants in 2008
was eventually adjudicated in favour of the Appellants in 2019, it is
evident that there was a delay in the processing of the refund in favour
of the Appellants. The Original Authority and the Appellate Authority
have proceeded on the premise that the communication dated 27
February 2019 is a claim for refund, which is factually incorrect - The
said communication dated 27 February 2019 by the Appellants is only
forwarding and inviting the attention of the jurisdictional refund
sanctioning authority to the Final Order dated 9 July 2018 passed by this
Tribunal and cannot be construed as a fresh claim
................................
It is settled by the decision of the Hon‟ble Supreme Court in Ranbaxy Laboratories case [2011 (10) TMI 16 - SUPREME COURT] that the said period has to be reckoned from the date of the application for exemption/refund, which in the instant case is 10 January 2008, and not the date of the adjudication or appellate order sanctioning the refund........................"
13. Therefore, following the ratio laid down in the above case laws, we hold that the appellant is eligible for the interest taking the refund claim date as the base. The appellant has filed the refund claim on 22.11.2007. Hence after considering the period of 3 months for processing of this application, the interest would be payable from 22.02.2008 till the date on which the refund has been paid to them.
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14. Now, we take up the issue of the rate of interest to adopted. We find that this issue also stands decided in several cases.
15. The Allahabad Bench, in the case of Parle Agro Pvt Ltd Vs CCGST, Noida
- 2022(380) ELT 219 (Tri-All), has held as under:
29. Section 11BB provides for interest on delayed refund. It states that if any duty ordered to be refunded under sub-section (2) of Section 11B is not refunded within three months from the date of receipt of the application, then the applicant shall be entitled to interest after the expiry of three months from the date of receipt of the application at such rate not below 5% and not exceeding 30% as may be notified by the Central Government in the Official Gazette. In the present case, the provisions of Section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the order dated 31-1-2017, which order has attained finality. In this connection reference can also made to the decisions of the Allahabad High Court in Pace Marketing Specialities and Ebiz.Com Private Limited, wherein after making reference to the decision of the Supreme Court in Sandvik Asia Ltd., the High Court granted interest at the rate of 12% per annum in matters relating to refund of amount deposited during investigation and adjudication. In Riba Textiles, the Tribunal also granted interest at the rate of 12% on refund of amount deposited during investigation and at the time of entertaining the stay application. In view for the aforesaid decisions, and the fact that the rate of interest varies from 6% to 18% in the aforesaid Notifications issued under Sections 11AA, 11BB, 11DD and 11AB of the Excise Act, the grant of interest @ 12% per annum seems to be appropriate. Thus, for the reason stated above, Excise Appeal No. 70628 of 2019 is allowed and the order dated 28-5-2019, passed by the Commissioner (Appeals) is modified to the extent that interest shall be granted to the appellant @ 12% instead of @ 6% from the date of deposit till the date of payment.
16. In Churchit Interntional Vs CC (Export), vide Final Order No.58537/2024 dated 6.9.2024, the Delhi Tribunal has held as under :
20Customs Appeal No. 75124 of 2025 The Appellant was made to deposit Rs.50,00,000/- involuntarily under threat of arrest during investigation on 18.03.2014.
Thereafter, Assistant Commissioner of Customs (Refund) vide Order-in- Original No.045/2021 dated 24/12/2021 allowed the refund of Rs. 50,00,000/-but had not granted interest on the said amount. 5. Having heard both the parties and after perusing the record it is worth noting that amount of Rs.50,00,000/- was deposited much before issuance of show cause notice and adjudication order did not confirm any demand against the appellant and thus the said amount was never appropriated against any demand. There was no demand against the appellant and accordingly such collection of amount was without authority of law. 15. This Tribunal in the case of M/s. Parle Agro Pvt. Ltd. Vs. Commissioner, Central Goods & Service Tax, Noida (vice- Versa) reported as 2021 (5) TMI 870 - CESTAT ALLHABAD has held that in the light of the above discussed notifications the grant of interest at the rate of 12% per annum seems to be appropriate. Tribunal Delhi (CESTAT) also in the case of Duggar Fibre Pvt. Ltd. Vs. Commissioner of C. Ex., Cus. & CGST, Delhi reported as 2021 (378) ELT 293 (Tri.-Del.) wherein the adjudicating authority was ordered to grant interest @ 12% per annum from the date of deposit till the date of refund.
17. Following the ratio of the cited case laws of Parle Agro and Churchit, we hold that the appellant would be eligible for interest @ 12% per annum.
29. We find that to the factual matrix of the present case, the cited case law is squarely applicable. Therefore, we hold that the Respondent would be eligible for Refund of the Customs Duty paid along with interest from the date of initial payment of the same in September 2022. The three months' time given for processing the refund from the date of initial payment of customs is to be excluded while calculating the interest. The interest is payable for the intervening period till the date the refund is granted to the respondent.
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30. The jurisdictional authorities are directed to grant the refund along with interest at the earliest since the appellant has been put to financial hardship for no reason whatsoever for about 4 years, also keeping in mind the increased burden of interest on the exchequer for each day of delay in granting the refund.
31. To summarize our decision:
(a) The Appeal filed by the Revenue is dismissed (b) The Respondent is required to granted the refund of the
Customs Duty paid along with interest @ 12% per annum payable from three months from the date of initial payment of Customs Duty by the appellant till the refund is granted.
31. The appeal stands disposed off on the above terms.
(Dictated and pronounced in the open court) Sd/-
(R. Muralidhar) Member (Judicial) Sd/-
(K. Anpazhakan) Member (Technical) Tushar Kr.