2026-VIL-1678-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Interest on delayed refund under Section 27A of the Customs Act, 1962 - Relevant date for computation of interest - Commissioner (Appeals) allowed interest at the rate of 6% per annum computed from three months after the date of filing of the original refund application - Whether interest under Section 27A of the Customs Act, 1962 is payable from the date of expiry of three months from the date of receipt of the refund application, or only from the date of expiry of three months from the date of the order finally sanctioning the refund - HELD - Section 27A mandates payment of interest where duty ordered to be refunded is not refunded within three months from the date of receipt of the application for refund, and the explanation thereto deems an order of refund passed by the Commissioner (Appeals), the Tribunal or any court to be an order passed under Section 27(2) for the purpose of Section 27A - The explanation only extends the deeming fiction to appellate orders and has no bearing on postponing the date from which interest becomes payable - Reliance was placed on the decision of the Hon'ble Supreme Court which held that liability to pay interest commences from the expiry of three months from the date of receipt of the application for refund and not from the date on which the order of refund is made - In this case, the application for refund was filed on 29.10.2018 and three months expired on 28.01.2019 and the refund has been granted to the assessee after long litigation on 16.09.2025, therefore, relying on the decision of the Hon’ble Apex Court in the Ranbaxy Laboratories’ case, respondent-assessee is entitled for interest from 28.01.2019 till 16.09.2025 - The appeal filed by the Revenue is dismissed
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GST & Customs updates: Sep'26
By CA Vivek Jalan

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