Custom, Excise & Service Tax Tribunal
Kuldeep Kaur vs Commissioner, Customs-New Delhi(Icd ... on 4 January, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH COURT NO.IV
Customs Appeal No. 50684 / 2021
[Arising out of Order-In-Appeal No. CC(A) CUSTOMS /D-II/MP/ ICD/TKD/
1517/2020-21 dated 08.02.2021 passed by the Commissioner of Customs
(Appeals) New Delhi]
KULDEEP KAUR APPELLANT
Vs.
COMMISSIONER OF CUSTOMS RESPONDENT
NEW DELHI (ICD TKD).
APPEARANCE:
Shri P A Augustian, Advocate for the Appellant Shri Ravi Kapoor, Authorised Representative for the Department CORAM:
HON'BLE MRS RACHNA GUPTA, MEMBER (JUDICIAL) DATE OF HEARING: November 15, 2021 DATE OF DECISION: 04-01-2022 FINAL ORDER No. 50003 /2021 PER RACHNA GUPTA The present appeal has been filed against the order in appeal No. 1517/2020 dated 08.02.2021. The issue involved herein is regarding denial of interest on the refund claim. The relevant factual matrix for the adjudication is as follows:
That the appellant had imported a brand new Toyota Land Cruiser against the declared value of Rs. 32,37,557/-. Bill of Entry No. 770385 dated 24.02.2009 was filed by the appellant for C/ 50684 / 2021 clearance of said vehicle for home consumption after payment of requisite customs duty ( Rs. 34,83,899/- ) The vehicle was ordered for home consumption by the proper officer. The vehicle however, was sold to Shri Mohammed Farooq Sarang on 02.03.2009 for an amount of Rs.73 lakh. Rs. 53 lakh were received as the advance payment. However, on 15.07.2009 DRI seized the said vehicle from said Shri Mohammed Farooq Sarang alleging illegality in import and forced Shri Mohammed Farooq Sarang to make payment of Rs. 26,93,993/- towards differential duty along with Rs.1,62,746/- as interest. Show cause notice dated 15.06.2011 was issued. Demand was initially confirmed vide Order in Original No. 30/2013 dated 30.08.2013. Thereafter the demand was confirmed even by Commissioner (Appeals) vide order dated 30.9.2014. However this Tribunal vide Final Order dated 24.10.2017 held that demand of duty as applicable to used car is not sustainable as the car in question was a new branded car.
However, the matter was remanded for de novo adjudication after proper valuation. Based on the findings of the Tribunal, the refund application for Rs. 52,72,191/- was filed by the appellant on 30.12.2017. However, the same was kept pending awaiting for outcome of the aforesaid denovo adjudication proceedings. The Original Adjudicating authority vide Order dated 31.08.2018 in furtherance of the direction of remand, accepted the declared value and dropped the demand of duty. Pursuant thereto a fresh application for Rs. 67,49,046/- was filed by the appellant on 01.10.2018. The said refund was allowed by the Original Adjudicating Authority vide Order in Original No. 1749/2018 dated 22.10.2018, however without interest. The appeal against the rejection of interest was also dismissed vide Order under challenge. Being aggrieved the present appeal has been filed.
2. I have heard Shri P A Augustian, learned Counsel for the appellant and Shri Ravi Kapoor, Authorised Representative for the Department.
2C/ 50684 / 2021
3. It is submitted that this Tribunal in the case of M/s. J K Cement Works vs. CCE & CGST (Final Order No. 51052/2021) Appeal No. E/50479/2019 dated 02.03.2021 has already held the entitlement of the assessee for the interest at the rate of 12% with respect to the delayed payments. It is submitted that since the demand was prima facie unsustainable, the denial of interest is unjustified and unreasonable. Order accordingly, is prayed to be set aside.
4. To rebut the submissions, learned Departmental Representative has mentioned that the refund has been sanctioned within three months of the relevant refund application. Hence the interest is rightly been denied. Appeal is prayed to be dismissed.
5. After hearing both the parties and perusing the record, my considered opinion is as follows:
The refund of Customs duty is available in terms of Section 27(1) of Customs Act, 1962. The provision reads as follows:
SECTION [27. Claim for refund of duty. -- [(1) Any person claiming refund of any duty or interest, --
(a) paid by him; or
(b) borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest :
The period of one year as mentioned above has to reckon in terms of Section 27(1B) of the Act. It reads as follows:
(1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely :--
(a) ......
(b) where the duty becomes refundable as a consequence of any
judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction;3
C/ 50684 / 2021
(c) .........
When these provisions are applied to the facts of present case it is clear that the duty which was prayed to be refunded was paid prior to show cause notice of 2011 was issued. The order of Original Adjudicating Authority which dropped the impugned demand was passed on 31.08.2018 and application praying for refund was filed on 1.10.2018. The refund in this case was admittedly sanctioned on 22.10.2018. Thus it is clear that refund of Customs duty paid was sanctioned within one month of the application seeking that refund. I do not find any infirmity in the Order under challenge where interest has not been awarded while sanctioning refund. Relevant provisions for entitlement of interest is section 27A of Customs Act, 1962.
"SECTION [27A. Interest on delayed refunds. -- If any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub- section (1) of that section, there shall be paid to that applicant interest at such rate, [not below five per cent] and not exceeding thirty per cent per annum as is for the time being fixed [by the Central Government by Notification in the Official Gazette], on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty :"
6. Bare perusal of the provision makes it clear that interest has to be given by the department while sanctioning the refund only when the sanction order has been passed after period beyond three months of seeking refund. As already observed, it was not the case, hence I do not find any infirmity in the order under challenge. Accordingly, the same is hereby upheld and appeal stands dismissed.
(Pronounced in the open Court on 04-01-2022 ) ( RACHNA GUPTA ) MEMBER (JUDICIAL) ss 4