Case Law Details
H L G Trading Vs Commissioner of Customs (CESTAT Chandigarh)
CESTAT Chandigarh held that interest on refund not eligible if the assessment is finalized within three months as prescribed under Section 18(4) of the Customs Act, 1962. Accordingly, appeal dismissed.
Facts- The appellant imported 100% nylon yarn raw white in yanks stock lot under 23 bills of entry between August 2013 to September 2014. The goods imported were provisionally assessed on account of verification undertaken by the department qua the description, value and availability of Notification No. 30/2004-CE dated 09.07.2004 with respect to the said goods from levy and collection of countervailing duty. The bills of entry were finally assessed, accepting the declared value of description of goods under final assessment orders dated 28.02.2017.
The appellant therefore filed a claim for refund of an amount of Rs.46,50,912/- paid as 20% deposits under the PDA Regulation, 2011. The appellant also made a claim for interest on the said sums. Vide order dated 19.06.2017, the original authority admitted the claim and sanctioned the said sums of Rs.46,51,012/-. However, the claim for interest was rejected. Commissioner (Appeals) rejected the appeal. Being aggrieved, the present appeal is filed.
Conclusion- This issue is no more res integra and this Tribunal in the case of M/s Saraswati Knitwear Pvt Ltd has examined this issue and held that the appellant-assessee is not entitled to interest on refund if the assessment is finalized within three months as prescribed under Section 18(4) of the Customs Act, 1962.
Held that the appellant is entitled to interest if the refund is payable after the expiry of 3 months from the date of final assessment as per Section 18 (4) of the Customs Act whereas in the present case the refund was granted within 3 months as prescribed under Section 18 (4) of the Act.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 15.03.2021 passed by the Commissioner (Appeals), CGST, Ludhiana whereby the learned Commissioner (Appeals) has rejected the claim of the appellant for interest under Section 27A of the Customs Act, 1962.
2. Briefly stated facts of the present case are that the appellant imported 100% nylon yarn raw white in yanks stock lot under 23 bills of entry between August 2013 to September 2014. The goods imported were provisionally assessed on account of verification undertaken by the department qua the description, value and availability of Notification No. 30/2004-CE dated 09.07.2004 with respect to the said goods from levy and collection of countervailing duty. The bills of entry were finally assessed, accepting the declared value of description of goods under final assessment orders dated 28.02.2017. The appellant therefore filed a claim for refund of an amount of Rs.46,50,912/- paid as 20% deposits under the PDA Regulation, 2011. The appellant also made a claim for interest on the said sums. Vide order dated 19.06.2017, the original authority admitted the claim and sanctioned the said sums of Rs.46,51,012/-. However, the claim for interest was rejected on the ground that 20% deposit do not partake the nature of duty under the Customs Act, 1962 and are security deposits refund of which do not attract interest liability on the department relying upon the orders of the Tribunal in Rajendra Mechanical Industries Vs. CC [2005 (180) ELT 183] and that of the three Members Bench in Advance Mechanical Works Vs. CCE [2005 (182) ELT 460]. Challenging the rejection of the claim for interest, the appellant filed appeal before the Commissioner (Appeals) who vide the impugned order has rejected the appeal by relying on the very same judgments of this Tribunal and holding that 20% deposits in terms of PDA Regulation 2011 is not duty and do not fall within the ambit of section 27 of the Customs Act, 1962 which deals with refund of duty. Hence, the present appeal.
3. Heard both the parties and perused the material on record.
4. The learned Counsel, Shri Naveen Bindal, appearing on behalf of the appellant submits that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and law. He further submits that the appellant is entitled to interest on the refund amount which was paid during investigation or during adjudication proceedings. He further submits that payment of interest on refund is a corollary and consequence of the said refund claim being found admissible and disbursed to the assessee in full and the same cannot be wished away by the Revenue. In support of his submission, he relies on the following decisions:
- Impressive Management Solutions Pvt Ltd vs. CGST, Chandigarh – [Final Order No. 60090/2023 dated 06.04.2023 in ST/60268/2022]
- Parle Agro Pvt Ltd vs. CGST, Noida [2022 (380) ELT 219 (Tri. All.)]
- CCE Panchkula vs. Riba Textile Ltd [2022 (62) GSTL 136 (P&H)]
- Riba Textiles Ltd vs. CCE Panchkula [Final Order No. 60015/2020 dated 07.01.2020 in E/60446/2018]
5.1 On the other hand, the learned AR for the Revenue reiterates the findings of the impugned order and submits that the provisional assessment and final assessment are common phenomena in Customs and are governed under Section 18 of the Customs Act, 1962. He further submits that Section 18 prescribes all the provisions with regard to provisional assessment and final assessment and grant of refund and interest thereon as the case may be. He also submits that sub-section 4 of Section 18 clearly specifies that interest is payable only if refund is not granted within 3 months from the final assessment. He further submits that once the refund has been granted as per Section 18 and 27A of the Customs Act within three months from the date of final assessment, in that case, the appellant cannot claim any interest. For this submission, he relies on the following decisions:-
1. Ajay Exports vs. CC Import Nhava Sheva [2015 (330) ELT 225 (Tr. Mum)]
2. CC vs. IOCL [2012 (282) E.L.T368 (Del)]
3. Bochasanwasi Shri Aksharpurushottam Swaminarayan Sanstha vs. CC Ahmedabad [2022 (380) E.L.T82 (Tri. – Ahmd.)
4. Ajay Exports vs. CC Import Mumbai [2016 (335) ELT 150 (Tr. Mum)
5. Pride Foramer vs. CC Import Mumbai [Order dated 14.06.2010 in WP No. 2629/2006
6. CC (Export) Chennai vs Sayonara Exports Pvt Ltd. [2015 (321) ELT 583 (Mad.)
7. M/s. Nirma Ltd. vs. CC Jamnagar (Prev.) [MANU/CS/0008/2022
8. Veer Overseas Ltd. Versus CCE, Panchkula [2018 (15) G.S.T.L. 59 (Tri. – Lb)
9. UOI vs. Cosmo Films Limited vide order dated 28.04.2023 (SC)
5.2 The learned AR further submits the identical issue has been considered by this Tribunal in the case of M/s Saraswati Knitwear Pvt Ltd vs. CC, Ludhiana [Final Order No. 60376/2023 dated 13.09.2023 in Appeal No. C/60442/2022], wherein on identical facts, this Tribunal has dismissed the appeal of the appellant-assessee.
6.I have considered the submissions made by both the parties and perused the decisions relied upon by both the parties. I find that this issue is no more res integra and this Tribunal in the case of M/s Saraswati Knitwear Pvt Ltd (supra) has examined this issue and held that the appellant-assessee is not entitled to interest on refund if the assessment is finalized within three months as prescribed under Section 18(4) of the Customs Act, 1962. It is pertinent to reproduce the relevant findings of the Tribunal, which are reproduced herein below:
“6. After considering the submissions of both the parties and perusal of material on record, I find that in the present case, the assessment was finalized on 29.12.2021 and in pursuance to the final assessment refund was sanctioned to the appellant vide OIO dated 14.03.2022 which is within the time limit of 3 months from the date of final assessment. The original authorities rejected the request of interest and vide impugned order; the Commissioner has also rejected the appeal seeking grant of interest on delayed refund. Further, I find that the appellant was provisionally assessed under Section 18 of the Customs Act. The relevant provisions of the Customs Act are reproduced herein below:-
Section 18. Provisional assessment of duty
[(1) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46 2 [and section 50],–
(a) where the importer or exporter is unable to make self-assessment under subsection (1) of section 17 and makes a request in writing to the proper officer for assessment; or
(b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or
(c) where the importer or exporter has produced all the necessary documents and shed full information but the proper
officer deems it necessary to make further enquiry; or
(d) where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry,
the proper officer may direct that the duty leviable on such goods be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty as may be finally assessed or re-assessed as the case may be, and the duty provisionally assessed.]
2 [(1A) Where, pursuant to the provisional assessment under sub-section (1), if any document or information is required by the
proper officer for final assessment, the importer or exporter, as the case may be, shall submit such document or information
within such time, and the proper officer shall finalise the provisional assessment within such time and in such manner, as may be prescribed.]
(2) When the duty leviable on such goods is assessed finally 3 [or re-assessed by the proper officer] in accordance with the provisions of this Act, then–
(a) …………..,
(b) …………..,
6 [(3) The importer or exporter shall be liable to pay interest, ……..
(4) Subject the sub-section (5), if any refundable amount referred to in clause (a) of sub-section (2) is not refunded under that sub-section within three months from the date of assessment, of duty finally or reassessment of duty, as the case may be, there shall be paid an interest on such un-refunded amount at such rate fixed by the Central Government under section 27A till the date of refund of such amount.]
7. Further, I find that the decisions relied upon by the Ld. Counsel for the appellant are not applicable to the present case because they were not decided under the provisions of Section 18 read with Section 27(A) of the Customs Act, 1962.
8. Further, I find that the decisions relied upon by the Ld. DR are applicable in the present case. In this regard, I may refer to the decision of CCE vs. IOCL 2012 (282) E.L.T368 (Del) wherein it has been held by the Hon’ble Delhi High Court that in the case of provisional and final assessment, the refund is payable in terms of Section 18 of the Customs Act, 1962. The relevant portion of Para 20 of the judgment is reproduced herein below:-
“20.. In the first situation the assessee has paid provisional duty which gets reduced on final assessment. The assessee, therefore, becomes entitled to refund which is payable in terms of Rule 9B of the Excise Act [(sic) Rules], 1944 or Section 18 of the Act.”
9. Further, I find that the appellant is entitled to interest if the refund is payable after the expiry of 3 months from the date of final assessment as per Section 18 (4) of the Customs Act whereas in the present case the refund was granted within 3 months as prescribed under Section 18 (4) of the Act. Therefore, in my considered view, the appellant is not entitled to any interest in view of the statutory provisions and the case laws cited (supra).”
7. In view of my above discussion and by following the ratio of the above decision, I am of the view that there is no infirmity in the impugned order, accordingly, I uphold the same by dismissing the appeal of the appellant-assessee.
(Operative part of the order pronounced in the open court)
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