Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

Comments

Print   |    |  Comment

PJ/Case Law/2013-14/2059

Whether interest on delayed refund admissible from date of passing order by Tribunal or date of filing refund application?

Case:- COMMISSIONER OF CUSTOMS (AIR PORT & ADMINISTRATION) , KOLKATA Vs. M/s. AMARNATH ENVIROPLAST  LTD.

Citation:- 2014-TIOL-163-CESTAT-KOL

Brief facts:- Briefly stated facts of the case are that the Respondent (i.e. the importer) had filed the refund application for Rs. 28,26,491.47 on 28.10.2002 on the ground that the Hon'ble Calcutta High Court had passed an order dated 20.11.2000 quashing the Board's Circular No.38/2000-Cus dated 10.05.2000 on leviability of C.V. duty on plastic granules. The refund claim was rejected by the erstwhile Dy. Commr., (Refund), Customs House, Kolkata. Being aggrieved the Respondent filed an appeal to Commissioner (Appeals) who vide order dated 16.02.2005 upheld the above order. Being aggrieved with the order of the Commissioner (Appeals), the importer filed an appeal before the CESTAT and the CESTAT vide Order No.A-1025/KOL/2007 dated 29.05.2007 set aside the order of the Commissioner (Appeals) and allowed their Appeal with consequential relief. As per order of the CESTAT refund was granted, vide Order No.29/2008 dated 13.05.2008, the importer thereby filed an appeal before Commissioner (Appeals) demanding payment of interest for delayed payment of refund. The Commissioner (Appeals), vide order dated 17.09.2008 directed to pay interest for the period from 28.01.2003 (i.e. the date immediately following expiry of 3 months from the date on which the importer had filed its application for refund i.e. on 28.10.2002 till 13.05.2008 (the date on which the refund was sanctioned). Being aggrieved, Revenue has filed this appeal.

Appellant’s contention:-The Appellant has submitted that the Commissioner of Customs (Appeals) has directed to pay interest against the provisions of Section 27A read with section 27 of the 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 receipt of such application till the date of refund of such duty".
 
Explanation- Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal (National Tax Tribunal) or any court against an order of the (Assistant Commissioner of Customs or Deputy Commissioner of Customs) under Sub-section (2) of Section 27, the order passed by the Commissioner (Appeals), Appellate Tribunal (National Tax Tribunal) or as the case may be, by the Court shall be deemed to be an order passed under sub-section for the purposes of this section).”
 
It is evident from the explanation to section 27A of the Customs Act, 1962, that the order of refund passed by the CESTAT against order of the Assistant Deputy Commissioner of Customs, is deemed to be an order for the purpose of payment of refund under Section 27(2) of the Customs Act, 1962. Consequently, interest is also payable with reference to the date of an order of CESTAT. As such, the interest if any, is payable under Section 27A of the Customs Act, 1962, three months after the date of the CESTAT Order.
 
Respondent’s contention:-The Respondenthave filed Cross Objection claiming that several Benches of the Tribunal have held that interest is payable from three months of the date of receipt of Application under Section 11B(1) ibid. The Respondent  has cited this Tribunal's decision in the case of M/s. Precision Polyplast (P) Ltd. vide final Order No.A-284/KOL/2011 dated 22.09.2011 rejected the Department's appeal and allowed interest to the appellant. He also placed reliance on Apex Court's judgement in the case of Ranbaxy Laboratories Ltd. vs. Union of India - 2011 (273) E.L.T. 3 (SC) = (2011-TIOL-105-SC-CX).   
 
Reasoning of judgment:- After hearing both sides, the tribunal find that in case of Ranbaxy Laboratories Ltd. (supra), the Apex Court has held that interest of delayed refund is payable under Section 11BB of the Central Excise Act, 1944 on the expiry of three months from the date of receipt of Application under Section 11B and not from the date of order of refund or Appellate Order allowing such refund. The Hon'ble Court has observed as under:-
 
" It is manifest from the afore-extracted provisions that Section 11BB of the Act comes into play only after an order for refund has been made under Section 11B of the Act. Section 11BB of the Act lays down that in case any duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. Manifestly, interest under Section 11BB of the Act becomes payable, if on an expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpretation of Section 11BB that can be arrived at is that interest under the said Section becomes payable on the  expiry of a period of three months from the date of receipt of the application under sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable."
 
Accordingly from the ratio laid down by the Apex Court, the tribunal  find that interest under section 11BB becomes payable on the expiry of a period of three months from the date of receipt of the application under sub-section 1 of section 11B of the Act. This judgement of the Hon'ble Supreme Court has been followed by the Tribunal in the case of R.K. Chemicals vs. CC(Import), Mumbai- 2013 (287) E.L.T. 382 (Tri.-Mumbai) = (2012-TIOL-395-CESTAT-MUM)and the Hon'ble High Court of Andhra Pradesh in the case of CC & CE, Hyderabad-III vs. Ampro Industries Pvt. Ltd.- 2012 (278) E.L.T. 306(AP) = (2012-TIOL-314-HC-AP-CX). As such, the tribunal does not find any merit into the Appeal filed by the Revenue and therefore the same is rejected. Cross Objection filed by the respondent Assessee also gets disposed of.
 
Decision:- Appeal dismissed.

Comment:- The gist of the case is that the  interest on delayed refunds under section 11BB becomes payable on the expiry of a period of three months from the date of receipt of the application and not from the date of order passed by the Tribunal. This view is also confirmed by the Apex Court in the case of Ranbaxy Laboratories Ltd. 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com