Poddar Pigments Limited Vs Commissioner (CESTAT Delhi)
Summary: CESTAT Delhi dismissed Poddar Pigments Limited’s appeal against rejection of its claim for refund of Rs.7,95,166 paid as interest along with IGST on 18 Bills of Entry. The imports were made during the disputed period beginning 31.10.2017, after the appellant had availed IGST exemption under Notification No.18/2015-Cus. dated 01.04.2015 and subsequently requested reassessment by letter dated 18.05.2018 on the basis that the applicable pre-import condition had not been fulfilled. The Tribunal noted that the Supreme Court’s decision dated 28.04.2023 in Union of India vs. Cosmo Films Ltd. had upheld the validity of the pre-import condition introduced by Notification No.79/2017 dated 13.10.2017. It held that the appellant was not entitled to the IGST exemption and that the subsequent voluntary payment of IGST constituted delayed payment. Distinguishing Mahindra & Mahindra Ltd. Vs. Union of India, the Tribunal held that IGST on imports is not an additional duty of customs and that the reasoning applicable to interest on additional customs duty did not apply to IGST. Relying upon the statutory framework discussed in M/s. Mayur Uniquoters Limited and others, the Tribunal held that IGST paid on imports is subject to the same interest consequences applicable to delayed IGST payments. It further held that liability to pay interest is automatic irrespective of whether the delay was intentional. The Tribunal consequently upheld the rejection of the refund claim and dismissed the appeal on 14.10.2024.
Dispute Over Refund of Interest Paid on IGST
Poddar Pigments Limited had imported raw materials through 18 Bills of Entry during the period from 31.10.2017 to 13.12.2017 under various Advance Authorizations issued by DGFT. The appellant had availed IGST exemption at “Nil” duty under Notification No.18/2015-Cus. dated 01.04.2015, as amended.
