2026-VIL-316-DEL-CU
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CUSTOMS High Court Cases

Customs - Interest on refund of Customs duty - Petitioners imported mobile devices and paid customs duty at higher rate but later claimed refund as they were eligible for lower concessional rate under notification - Whether Petitioners entitled to interest on refund amounts – HELD – The Petitioners are entitled to interest on refund amounts from the date when they first applied for re-assessment of Bills of Entry, as there was substantial delay in Department passing the re-assessment orders despite Petitioners' applications. At the time when applications for re-assessment were filed, the judgment in ITC Limited v. CCE, Kolkata, which laid down the requirement of re-assessment before claiming refund, had not been passed. Further, the customs duty paid by Petitioners was clearly not payable in view of the Supreme Court judgment in SRF Ltd. v. Commissioner of Customs, which was the prevailing law at the relevant time. Thus, Petitioners could not be deprived of interest on valid refund amounts for such a long period - in the matters of W.P.(C) 10977/2017 and W.P.(C) 11319/2017, since the refunds were granted within the stipulated 3 months period under Section 27A of the Customs Act, 1962, no interest would be payable. However, in the matters of W.P.(C) 1225/2024, W.P.(C) 1291/2024, W.P.(C) 1297/2024, and W.P.(C) 1325/2024, there was a substantial delay by the department in passing the re-assessment orders, despite the petitioners' applications for re-assessment - The impugned orders in the four writ petitions were modified with the direction that the Deputy Commissioner (Refund) shall compute the interest payable and grant such interest to the Petitioners within a period of three months - The petitions are disposed of
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