ORDER
V.K. Jain, Member (T)
1. The instant appeal has been filed by M/s. Rajendra Mechanical Industries Limited, Mumbai against the Order-in-Appeal No. KOL/CUS/122/CKP/2003 dated 30.09.2003 passed by the Commissioner of Customs, (Appeals), Kolkata.
2. The issue involved relates to admissibility of the payment of interests under Section 27-A of the Customs Act, 1962 in respect of refund of penalty, security, furnished under PD Bond and bank guarantee. The Commissioner (Appeals) has rejected the refund claim that the statutory provisions prescribed under Section 27A of the Act is applicable in respect of delayed refund of duty only. Deposits of penalty, security or bank guarantee do no fall within the ambit of Section 27 of the Act. Further it has been observed by him that the complete application in respect of refund of duty was received by Revenue on 25.03.1999 and refund cheque was issued on 16.04.1999. Since the amount was refunded within three months from the date of receipt of complete application the appeal for payment of interests on delayed refund of duty is not legally sustainable.
3. I have heard Shri S.K. Chakraborty, Regional Sales Manager and authorized signatory for the Appellant and Shri J.R. Madhiam, Ld. JDR for Revenue. Shri Chakraborty reiterates the ground given in their appeal petition. Shri Madiam submits that Commissioner (Appeals), order is correct in law and as such the appellant’s Appeal to be rejected.
4. The interests on delayed refund is covered under Section 27A of the Customs Act which reads as follows :
“If any duty ordered to the refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date or receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, (not below five per cent) and not exceeding theirty per cent per annum as is for the time being fixed (by the Central Govt by Notification in the Official Gazette) on duty duty from the date immediately after the expiry of three months from the date of receipt as such application till the date of refund of such duty :
Provided that where any duty, ordered to the 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 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 Custom of Deputy Commissioner of Customs) under sub-section (2) of section 27, the order passed by the Commissioner (Appeals), Appellate Tribunal or as the case may be, by the court shall be deemed to be an order passed under that sub-section for the purpose of this section.”
5. I find that the refund has been sanctioned to the appellant within three months after their complete refund application was received. The appellant have not submitted any evidence against the findings of the Commissioner that refund was issued within three moths from the date of receipt of complete application. As such, the appeal for payment of interests on delayed refund of duty is not sustainable. In the circumstances Section 27A is not attracted. I also find force in the Commissioner’s findings that Section 27A of the Customs Act is applicable in respect of delayed refund of duty only. The ‘duty’ has been defined under sEction 2(15) of the Act, which means a duty of Customs leviable under the Act. Section 27 of the Act refers to the refund of duty paid by any person, in pursuance of an order of assessment. Deposits of penalty, security or bank guarantee do not fall within the ambit of Section 27 of the Customs Act. Hence the same does not cover refund of penalty or security deposit etc. The Ministry of Finance circular No. 275/37/2K-CX.8A dated 02.01.2002 does not help the Appellant as it clarifies the procedure for refund/return of deposits made under section 35F of CEA, 1944 and Section 129E of Customs Act, 1962.
6. In view of the above, I upheld the order of the Commissioner (Appeals) and reject the appeal filed by the appellant.