By TIOL News Service

MUMBAI, AUG 16, 2016: THE appellant imported 1000 MTs polyester chips which was assessed to higher duty of Rs. 95,34,864/- on revised value of USD 1400 PMT against an amount of Rs.40,86,370/- on declared value of USD 600 PMT.

The Commissioner (A) set aside the order of assessment following which the appellant filed a refund claim on 27th July 2009.

This consequential refund was sanctioned but the claim for interest on delayed payment of refund was not allowed.

It is the contention of the original authority, as upheld by the appellate authority, that though the refund application was filed on 27th July 2009, the original documents required for processing were furnished only on 22 nd September 2010 and the refund had been sanctioned within three months of the latter date and, therefore, since there is no delay, no interest arises.

The importer is before the CESTAT and inter alia cites the Board Circular 670/61/2002-CX dated 01.10.2002 in support.

The AR justified the reasons adduced by the lower authorities while denying the interest claim. Attention is also drawn to the Explanation to Rule 2 of the Customs Refund Application (Form) Regulation, 1995 which states:

"Explanation - For the purposes of payment of interest under section 27A of the Act, the application shall be deemed to have been received on the date on which a complete application as acknowledged by the Proper officer, has been made."

The Bench observed -

"7. It is their contention that the original authority cannot deviate from the definition of a complete application. If the application was, as claimed in the impugned order, not complete and the appellant was not in possession of the acknowledgement of the complete application. Regulation 2(3) of the Regulation supra, required the proper officer to return the application to the applicant, within ten days of receipt in the event of any deficiency, to enable the applicant to re-submit the application after rectifying the same.

8. Even if the claim of revenue that the documentation is incomplete is not in doubt, it is seen that no such deficiency was brought to the notice of the applicant. In these circumstances, the claim of incomplete application does not find any support. The application, therefore, must be presumed to be complete. Further, I find from a perusal of section 27A of the Customs Act, that where a duty is ordered to be refunded and the said amount is not refunded within three months from the date of receipt of application, the interest liability shall crystallize. Accordingly, in the case of the appellant, failure to refund the amount sought within the said time period brings section 27A into operation without fail. The appellant is entitled to interest as laid down in Section 27A in accordance with the rates fixed by the Central Government notification and the same is allowed."

The appeal was disposed of.

(See 2016-TIOL-2069-CESTAT-MUM )