Custom, Excise & Service Tax Tribunal
M/S. Pankaj Steel Corporation vs Commissioner Of Customs, Nch, Mumbai on 11 April, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/85188/16 [Arising out of Order-in- Appeal No. MUM-CUSTM-SMP-189/2015-16 dated 21/10/2015 passed by the Commissioner of Customs(Appeals), Mumbai-I] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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M/s. Pankaj Steel Corporation
:
Appellants
VS
Commissioner of Customs, NCH, Mumbai
:
Respondent
Appearance
Shri. Pankaj B. Agrawal, Manager for the Appellants
Shri. Chatru Singh, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 11/4/2016
Date of decision: /2016
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. MUM-CUSTM-SMP-189/2015-16 dated 21/10/2015 passed by the Commissioner of Customs(Appeals), Mumbai-I whereby Ld. Commissioner upheld the Order-in-Original No. 251/AKS/REFUND/EXP/2013-14 dated 19/11/2013 and rejected the appeal filed by the appellant.
2. The issue involved in the present case is whether the appellant is entitle for interest on delayed sanction of refund of SAD under Notification No. 102/07-Cus DATED 14/9/2007. Ld. Commissioner(Appeals) denied the interest referring to Board Circular No.6/2008 DATED 28/4/2008 wherein relevant para reads as under:-
4.3. With the extension of time limit and the requirement to file claims on a monthly basis, Board feels that the number of refund claims should be manageable for disposal within the normal period of three months. Further, in the absence of specific provision for payment of interest being made applicable under the said notification, the payment of interest does not arise for these claims. However, Board directs that the field formations shall ensure disposal of all such refund claims under the said notification within the normal period not exceeding three months from the date of receipt. Accordingly, Ld. Commissioner held that there is no provision for grant of interest in respect of refund under Notification No.102/07-Cus dated 14/9/2007.
3. Shri. Pankaj B. Agrawal, Ld. Manager of the appellant company submits that though there is no explicitly mention about the interest on delayed sanction of refund under Notification No. 102/07-Cus however all the refund under Customs Act, are governed by Section 27 of the Customs Act and accordingly interest as provided under Section 27 should be granted. He further submits that on the identical issue, Honble Madras and Delhi High Courts have allowed the interest in the following judgments:
(a) Ksj Metal Impex(P) Ltd Vs. Union of India[W.P.NO. 959 of 2013 order passed on 21/1/2013]
(b) Principal Commissioner of Custom Vs. Riso India Pvt Ltd[CUSAA 20/2015 order passed on 7/10/2015] He submits that in view of the above two High Courts judgments, the appellant is entitle for interest on delayed sanction of refund.
4. On the other hand, Shri. Chatru Singh, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue, reiterates the findings of the impugned order. He further submits that levy of special additional duty is provided under Section 3A of Customs Act, 1962 therefore as per the judgment of Delhi High Court in case of Pioneer Silk Mills Pvt. Ltd Vs. Union of India [1995(80) ELT 507] provision related to refund shall not apply to the levy of duty under Section 3. In this regard, he also placed reliance on following cases:
(a) Collector of C. Ex. Ahmedabad Vs. Orient Fabrics Pvt Ltd[2003(158)ELT 545(S.C.)]
(b) Dudani Metal Agencies Vs. Commissioner of Customs, Jamnagar[2014(312) ELT 801(Tri. Ahmd.)]
(c) Audioplus Vs. Commissioner of Customs (Imports), Raigad[2011(264) ELT 516(Tri. Mumbai)]
(d) M. P. Re-cycling Co. Pvt Ltd Vs. Commissioner of Cus. (Imports), Mumbai[2015(318) ELT 171(Tri. Mumbai)] He submits that in view of the above judgments, this Tribunal held that Section 27 is not applicable in case of refund under Notification No. 102/07-Cus therefore the interest provisions inbuilt in Section 27 shall also not be applicable in case of refund under Notification No. 102/07-Cus.
5. I have carefully considered the submissions made by both sides.
6. I find that the very same issue has been considered by the Honble High Court of Madras and Delhi. In case of Ksj Metal Impex (P) Ltd (supra) passed by the Honble Madras High Court, the judgment was passed under writ jurisdiction. However in case of Riso India Pvt Ltd. (supra) the Honble Delhi High Court has passed judgment dealing with customs appeal filed under Section 130 of the Customs Act, 1962 wherein High court has passed following order:
20. In the context of the present case, Sections 27 and 27A of the Act form a statutory scheme for grant of refunds. Section 27A unambiguously states that where there is a delay in making the refund, interest would be payable on the amount of refund, in the manner stipulated under Section 27A of the Act. A collective reading of Section 3(8) of the CTA and Sections 27 and 27A of the Act leads to the conclusion that the provisions in the Act concerning refunds and interest on delayed refunds, would equally apply to refund of SAD leviable under Section 3 of the CTA. Circular No.6/2008 to the extent that it seeks to deny a successful applicant for refund of SAD, in terms of Notification No. 102/2007, interest on such refund in terms of Section 27A of the Act, is inconsistent with and ultra vires Section 27A of the Act.
21. Consequently, in the present case, the Department was not justified in denying interest to the Respondent on the delayed refund of SAD by resorting the para 4.3 of the CBECs Circular No.6/2008.
22. For the above reasons, the Court finds that no error has been committed by the CESTAT in allowing the appeal of the Respondent and ordering interest on the amount of SAD determined to be refunded, in terms of Section 27A of the Act.
23. No grounds have been made out for interference with the impugned order of the CESTAT.
24. The appeal is, accordingly, dismissed.
In view of the above judgments of Delhi High court in Customs Appeal, issue stand settled that the appeallant is entitle for the refund of interest on delayed sanction of refund under Notification No. 102/07-Cus. As regard the Circular No. 06/2008 relied upon in the above judgments, Honble High court has held the said circular as ultra virus. As regard the judgment relied upon by the Ld. A.R., none of the judgment dealing with the issue of refund under Notification No. 102/2007-Cus whereas judgment of the Honble Delhi High is directly on the issue involved herein. Therefore the ratio of the judgments cited by the Ld. A.R. are not relevant and not applicable to the present case. As per my above discussion and settled legal position on the issue involved, I am of considered view that appellant is entitle for the interest. The impugned order is set aside. Appeal is allowed with consequential relief, if any, in accordance with law.
(Order pronounced in court on____________) Ramesh Nair Member (Judicial) sk 6