2026-VIL-1488-CESTAT-CHD-CU
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CUSTOMS CESTAT Cases

Customs – Refund of Redemption Fine - Interest on Delayed Refund - Appellant filed refund claim for redemption fine on 23.08.2023. Respondent sanctioned refund but rejected claim for interest under Section 27A of Customs Act on ground that interest is not payable as matter was sub-judice before Commissioner (Appeals) and refund was sanctioned within three months from date of application - Whether Appellant is entitled to interest on refund of redemption fine deposited during adjudication proceedings even though matter was pending appeal and refund was sanctioned within three months from refund application date - HELD - After decision of CESTAT, neither confiscation was sustainable nor any fine was payable and whatever amount was paid was never legally due. Provisions of Section 11B of CEA, 1944 and Section 27A of Customs Act 1962 are pari materia. When amount has been refunded which was never legally payable, interest is compensatory in nature and Department is liable to pay interest for period during which Department retained amount of Appellant - The decision relied in impugned order pertains to grant of interest under Section 27A of Customs Act 1962, whereas in present appeals it is revenue deposit which Appellant was compelled to pay in order to redeem goods. Following Division Bench of CESTAT Allahabad in M/s Parle Agro Pvt. Ltd. upheld by Allahabad High Court and M/s Riba Textiles Ltd., the grant of interest at 12 percent per annum is appropriate - Interest is granted at rate of 12 percent per annum on refund of amount deposited during investigation and adjudication from date of deposit till date of actual payment - Appellant is entitled to interest at 12 percent per annum from date of revenue deposit till date of actual payment – The appeals are allowed
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