KLJ Plasticizers Ltd Vs C.C. – Kandla (CESTAT Ahmedabad)
The appeal concerned a claim for interest on an amount of ₹5 crore deposited by the appellant during the course of a customs investigation. The amount was paid on 18.09.2014 while the investigation proceeded on the allegation that actual consumption of inputs was lower than that permitted under advance authorisations. After adjudication and further appeal, the Tribunal in a separate final order dated 25.03.2019 held that once Standard Input Output Norms (SION) are fixed, goods are manufactured accordingly, and export obligations are fulfilled, duty cannot be demanded merely because actual consumption is lower than SION norms. On this basis, the appellant sought a consequential refund.
The adjudicating authority sanctioned the refund of ₹5 crore under Section 27 of the Customs Act, 1962, vide Order-in-Original dated 08.11.2019. The refund was sanctioned within three months from the date of receipt of a complete refund application. Subsequently, the appellant filed a separate application on 21.01.2020 seeking interest on the refunded amount. This application was rejected by the adjudicating authority on 16.03.2020 on the ground that the issue of interest already stood decided in the refund order. The Commissioner (Appeals) upheld this rejection, holding that since the refund was sanctioned within the statutory period, no interest was payable under Section 27A of the Customs Act, and that there was no provision in the Customs Act for granting interest from the date of deposit till the date of refund.
