2026-VIL-1474-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Refund of Duty - Rate of Interest on Delayed Refund - Commencement of Period for Payment of Interest - Appellant imported Yellow / Green peas and cleared them on payment of customs duty. Subsequently, on coming to know that the goods would be eligible for nil rate of duty under a notification, appellant filed request for re-assessment under Section 149. Appellant also filed a refund claim. After extended proceedings, re-assessment order was passed on 17.09.2025 and refund order was issued on 01.12.2025. The adjudicating authority sanctioned the refund without interest. The Commissioner of Appeals allowed interest at 6% from 20.02.2019 till date of actual disbursement. Appellant aggrieved by the rate of interest preferred appeal seeking 12% interest. Revenue also preferred appeal contending that interest should be calculated only from 17.09.2025 - Whether the interest on delayed refund of duty should be granted at the rate of 12% or 6%, and from which date should the interest be calculated - HELD - Following the principle laid down in Ranbaxy Laboratories Ltd. Vs Union of India and Hamdard Waqf Laboratories Vs Union of India, interest on refund commences from the date of expiry of three months from the date of receipt of the initial refund application. The liability of Revenue to pay interest is not from the date of re-assessment order but from the date when refund claim was initially filed. The chronological history of the case demonstrates that the procrastination is from Revenue's side and the case was settled by Tribunal in favour of the importer which was upheld at Apex Court level - Following the decision of Calcutta High Court in Rajendra Kumar Jain Vs Commissioner of Customs (Port), interest at the rate of 12% per annum is payable on refunded amount in absence of any statutory provision fixing lower rate of interest for refund of amount deposited during investigation and adjudication - Appellant is entitled to interest at 12% from 20.02.2019 till date of refund - Appeal filed by importer is allowed and appeal filed by Revenue is dismissed
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