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TMI Blog2019 (10) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction from Tax Research Unit dated 25.03.2011, no duty shall be levied in respect of foreign going vessel. Without considering the said Circular, the petitioner was forced to pay the duty of Rs. 2,38,24,418/- , through challan dated 05.07.2011. However by placing reliance on the said Circular, the petitioner applied for a refund of the CVD. The respondent rejected the refund application on the reason that no appeal was filed against the assessment order. Thereafter, the petitioner filed an appeal against the assessment order in respect of the Bill of Entry No.000649 dated 04.07.2011. The Appellate Authority by order dated 22.08.2012, found that the duty collected was not sustainable and without authority of law and hence, granted liberty to the petitioner to apply for refund. Pursuant to the order of the Appellate Authority, the petitioner filed a refund claim again on 20.09.2012. The Adjudicating Authority through order dated 04.09.2014, rejected the refund claim on the reason that the petitioner had availed CENVAT credit of the CVD paid. Though the petitioner had initially availed the CENVAT credit, however before utilization, reversed the same in October 2013, much before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y appellate remedy is available against the order impugned, still the writ petition is maintainable on the reason that only this Court has to interpret the scope and ambit of Section 27A of the Customs Act, 1962, dealing with interest claim, more particularly, with regard to the maintainability of the application filed by the petitioner under the said provision of law in the aforesaid facts and circumstances. The writ petition is maintainable also on the ground that the Adjudicating Authority misinterpreted the decision of the Hon'ble Supreme Court in the case of M/s.Ranbaxy Laboratories Ltd. vs. Union of India, 2011(273) ELT 3 (SC). On merits, it is to be noted that the duty wrongly collected originally, was found to be incorrect by the Appellate Authority, also by permitting the petitioner to apply for refund of the same. Therefore, the interest is liable to be paid from the date of the application. The CENVAT credit availed by the petitioner was already reversed in October 2013 itself, before the date of rejection of refund petition. Therefore, availing of CENVAT credit also cannot be cited as a reason to reject the claim. b) No fresh application was filed in 2018 for inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t find any factual disputes between the parties except on the nomenclature of the amount paid by the petitioner, pursuant to the order of assessment. In other words, according to the Revenue, the amount collected from the petitioner was only a 'deposit' and not a 'duty' qualifying application of Section 27A of the Customs Act, 1962. The Revenue also sought to rely upon the claim made by the petitioner that the amount so collected was only a 'deposit' and thus, they are entitled for refund of the same. Therefore, this Court is of the view that in order to decide the nature of the amount so collected and subsequently refunded to the petitioner, as to whether it is the 'duty' or 'deposit', this Court can exercise its jurisdiction and decide the same, so as to further decide as to whether the consequential benefit of interest on the belated refund is payable or not. Thus, I find that the present writ petition is maintainable. 9. Now, let me first consider the issue as to whether the amount collected from the petitioner is a "duty" or "deposit". 10. Before answering the above question, it is better to understand the difference between term "dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcessive collection of duty cannot make such collection as a deposit in the hands of revenue in order to escape from the clutches of Section 27A of the Customs Act to pay interest in the event of refund of such amount. The said Bill of Entry dated 04.07.2011 was put to challenge before the Appellate Authority, who in turn by order dated 22.08.2012, has observed as follows: "The issue to be decided in the instant case is that whether the ship docked in the port for unloading some commercial cargo can be charged to duty, treating the same as import of ship itself. From the records it is seen that the vessel though owned by the appellant docked at Chennai Port as any other foreign going vessel, can only be a temporary import. It is further proved that the same vessel left the port on foreign voyage to Myanmar. Hence, even though the bill of entry needs to be filed for temporary import no duty shall be chargeable as if treating the same as for home consumption. The TRU vide Circular No.B-1/2/2011-TRU dated 25.03.2011 had clarified that levy of CVD would not apply to such imports which are temporary in nature. Hence, at least on that count, the department should have desisted from cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 is to be refunded within three months from the date of receipt of application under Section 27(1) seeking for refund. If not paid within such time, the Revenue is bound to pay interest on such rate not below 5% and not exceeding 30% per annum on such duty immediately after the expiry of three months from the date of receipt of such duty. It should be noted at this juncture that the intention of legislature is clearly spelt out in the above provision of law that the interest is liable to be paid after the expiry of three months from the date of receipt of the application for refund and not from the date of passing of the order for refund. In my considered view, the object behind such provision for payment from the date of the application is obvious. Once an order of refund is made, liability to pay the same dates back from the date of its collection. In other words, an amount collected by the Revenue without authority of law or by erroneous application of provision of law, if retained by the Revenue all along without having any legal sanction to retain the same, such collection and retention would amount to unjust enrichment and thus liability to return or refund to the person fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner filed refund application once again on 20.09.2012, the Adjudicating Authority rejected the refund claim by his order dated 04.09.2014, mainly on the ground that the petitioner has already availed the CENVAT credit for the entire amount of duties paid and thus, they are not entitled for refund, as it would amount to double benefit. The said order of the Adjudicating Authority was further confirmed by the Appellate Authority by his order dated 29.05.2015, again on the same reason. However further challenge before the CESTAT resulted in remitting the matter back to the refund sanctioning Authority with a direction that such Authority shall verify whether the petitioner has reversed the credit before utilization. The said order was passed by CESTAT on 19.02.2018. Thereafter, the Original Authority as a consequence of the order passed by CESTAT, made denovo adjudication and ordered refund of Rs. 2,38,24,418/- to the petitioner, by order dated 02.07.2018. Even in the said order, it is evident that the amount collected from the petitioner was referred as a 'duty' and not 'deposit', as claimed before this Court. Therefore, it is evident that the amount of dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence including the documents referred to in Section 12A as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from or paid by him and the incidence of such duty and interest if any, paid on such duty had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this Sub-section as amended by the Act and the same shall be dealt with in accordance with the provisions of Sub-section (2) as substituted by that Act: Provided further that the limitation of one year shall not apply where any duty has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant is not refunded within three months from the date of receipt of application under Subsection (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 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 11B in respect of an application under Sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty. Explanation: Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal or any Court against an order of the Assistant Commissioner of Central Excise, under Sub-section (2) of section 11B, the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation and Anr. v. Commissioner of Income Tax MANU/SC/0623/2010 : (2010) 8 SCC 739. ...15. In view of the above analysis, our answer to the question formulated in para (1) supra is that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made." 20. Perusal of the facts and circumstances of the above case before the Apex Court and the present case would show that they are identical in nature and only difference is that the interest claim before the Apex Court arises under the Central Excise Act whereas in the present case, it arises under the Customs Act. I have already pointed out that Section 11BB of the Central Excise Act and Section 27A of the Customs Act are pari materia and therefore, I find that the above decision is squarely applicable to the present facts and circumstances of the case, which the Adjudicating Authority has failed to apply and follow. 21. Therefore, it is evident that the liability to pay interest would commence from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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