An assessee claiming refund is fully eligible for the payment of Interest when the department has taken longer time by calling the additional documents for their satisfaction, which are not prescribed to be produced with the refund application.
The decision has been taken IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH, AHMEDABAD in the matter of COMMISSIONER OF CUSTOMS (PREV), JAMNAGAR Vs M/s RELIANCE INDUSTRIES LTD.
Crux of the Decision: Assessee is eligible for the payment of Interest for the delay in sanction of the refund, done by the department. Non production of documents will be only of those documents which are prescribed so by the department and were required to be furnished along with the refund application. Any subsequent documents required by the department, which are not prescribed, can also be called for by the Revenue for their satisfaction but taking of such longer time for getting additional information for satisfaction cannot be made the ground for non-payment of interest.
Issue Involved: Whether Interest is required to be paid to the assessee for delay in sanctioning of refund claims by the Department?
Decision of the Bench: Non production of documents will be only those documents which are prescribed so by the department and were required to be furnished along with the refund application. Any subsequent documents required by the department, which are not prescribed, can also be called for by the Revenue for their satisfaction but taking of such longer time for getting additional information for satisfaction cannot be made the ground for non-payment of interest. If the view expressed by Revenue is accepted then in every refund claim, department will ask for certain information and shift the burden on the assessees for not furnishing the required information/ documents in time & the whole purpose of Section 27A of the Customs Act, 1962 will be thus defeated – Commissioner (A) setting aside the orders passed by the adjudicating authority denying payment of interest on the refund claims sanctioned beyond a period of three months from the date of filing refund applications is proper in law.
Conclusion: The department cannot shift the burden for the delay in the sanction of the refund on to the assessee and cannot escape from the payment of the interest on the delay in the sanctioning of the refund. The bench clearly held that if the view expressed by Revenue is accepted than in every refund claim department will ask for certain information and shift the burden on the assessees for not furnishing the required information/ documents in time and the whole purpose of Section 27A of the Customs Act, 1962 will be thus defeated. The non production of documents will be only of those documents which are prescribed so by the department and were required to be furnished along with the refund application. The department can also requires subsequent documents which are not prescribed but taking of such longer time for getting additional information for satisfaction cannot be made the ground for non-payment of interest. Hon’ble Apex Court in the case of Ranbaxy Laboratories Limited vs. UOI (supra) has clearly held that date of refund application and payment of interest after three months thereafter, cannot be postponed under any circumstances.
