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2016 (7) TMI 979 - CESTAT CHENNAI

2016 (7) TMI 979 - CESTAT CHENNAI - TMI - Claim of interest on delayed refund - the interest on delayed refund is directed to be paid which is beyond three months from the date of application for refund. - plea for interest on interest is rejected. - Decided partly in favor of appellant. - Appeal No. C/40543/2013 -Final Order No. 41089/2016 - Dated:- 12-7-2016 - Shri P. K. Choudhary, Judicial Member For the Appellant : Shri M. Masilamani, Consultant For the Respondent : Shri K.P. Muralidharan, A .....

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rity of law the appellant had to struggle for almost six years to get back the same. Hence they are rightly eligible for interest of ₹ 90,753/- along with interest on the same. The claim of interest was for the period from 05.02.2004 to 07.05.2010. But the appellate authority in his order sanctioned interest for the period 11.03.2008 to 25.08.2009 resulting in denial for a major period from 27.2.2004 to 10.03.2008. 3.1 He also submits that the appellants are entitled to payment of interest .....

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10 (253) ELT 160 (Tri.-Chennai) 4. Shri K.P. Muralidharan, A.C., Ld. A.R for the Revenue defends the impugned order. He submits that when there is no provisions under the Customs Act to sanction interest on delayed payment of interest and therefore appellant's plea cannot be accepted. He placed reliance on the jurisdictional Madras High Court judgement in the case of Commissioner of Customs (Exports), Chennai Vs VBC Industries Ltd. 2011 (270) ELT 314 (Mad.). 5. After hearing both sides, let .....

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ng 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 date of receipt of such application till the date of refund of such duty : Provided that where any duty, ordered to be refunded under sub-section (2) of section 27 in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives .....

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ion 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 that sub-section for the purposes of this section. Reading of the above goes to show that duty ordered to be refunded is to be paid within three months from the date of application. In the instant case, this has not been done. The Commissioner (Appeals) in the impugned order at para-7 held as under :- "7. From the .....

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d amount at least within three months from the above date, i.e. on or before 10.6.2008, in stead of doing so, the LAA prolonged the matter by sending a deficiency memo on 9.6.2009 and with a personal hearing on 10.6.2009, which shows that the LAA never studied/verified the documents available with the refund sanction. However, the claim was sanctioned within two months from the above date. This is not at all acceptable and definitely there is a delay by the department from 11.3.2008 till the dat .....

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y to cure few defects which cannot be a ground to deny the interest on delayed refund beyond three months. The appellants are therefore eligible for claiming the interest which is beyond three months from the date of receipt of the application sometime in the year 2004. The Commissioner of Customs is directed to pay the dues accordingly. 6. As regards the claim of "interest on interest", I find that the Hon'ble Madras High Court in the case of CC (Exports) Vs VBC Industries Ltd. (s .....

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tion 27A to accept the plea of the assessee that it is entitled to interest on the interest too on the score that Section 27(2) contemplated refund of duty and interest. The provision, as it stands under Section 27A of the Act, has to be read as restricted to claim on duty alone and it cannot be extended to include interest within its fold for the purpose further grant of interest under Section 27A of the Act. .... .... 16. In the decision reported in [2006] 280 ITR 643 - Sandvik Asia Ltd. v. CI .....

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nt of tax refundable to the assessee, on regular assessment. Consequently, as advance tax is treated as paid in pursuance of an order of assessment, interest is payable under Section 244 of the Income Tax Act. The expression amount in Section 244(1A) of the Income Tax Act, refers not only to tax, but also to interest, the term being a neutral expression. Thus, reversing the decision of the Bombay High court, the Apex Court held that the assessee was entitled to interest on the amount of interest .....

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way of writ Petition, challenging the order of the Commissioner, rejecting the claim of the assessee for interest. Hence, the decision relied on by the learned Senior Counsel appearing for the assessee has to be understood in the context of the facts therein and the provisions of law and the same cannot be of any assistance to the assessee herein. 21. As regards the applicability of general principles herein to the case, it must be pointed out that the proceedings before this Court is by way of .....

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regards the reliance placed on the decision reported in [1980] 123 ITR 429 (Mahalakshmi Sugar Mills Co. v. C.I.T.), it relates to a claim on expenditure on the interest paid on belated payment on sugarcane cess; hence, the said decision does not help the assessee herein. 23. In the light of the discussion thus made, going by the provisions under Section 27A of the Customs Act, we do not agree with the reasoning of the CESTAT. Consequently, the Civil Miscellaneous Appeal stands allowed and the su .....

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of Virchow Laboratories Ltd. Vs Cex. & Cus., Hyderabad 2012 (280) ELT 133 (Tri.-Bang.). The relevant paragraphs of said Tribunal's order is reproduced as under : "6. After considering the rival submissions, we are of the view that the issue agitated before us is already covered in favour of the Revenue by the Tribunal s Larger Bench decision in Sun Pharmaceuticals case (supra) wherein it was held that interest on delayed payment of interest was not permissible under the Central Exci .....

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