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Claim for refund of custom duty with interest @ 18% per annum on compound basis. Jurisdiction of Customs Authorities to withhold refund. Entitlement to interest on withheld refund. Analysis: The petitioner, engaged in the import business, imported stainless steel sheets in 1980 and applied for examination of damaged goods by Customs Authorities. Upon examination, 30% damage was confirmed, making the petitioner eligible for duty abatement under Section 22(1)(a) of the Customs Act, 1962. The Assistant Collector initially denied the refund claim, but the Collector (Appeals) overturned this decision in favor of the petitioner. Subsequently, the Collector of Customs filed an appeal to the Tribunal, which was dismissed due to being time-barred. A subsequent review application by Customs Authorities was also rejected by the Tribunal. The Tribunal's refusal to entertain a reference application further solidified the petitioner's entitlement to the refund. The Court noted that since the Collector (Appeals) had ruled in favor of the petitioner in 1983, the refund was due. Despite multiple legal proceedings, the Customs Authorities failed to issue the refund, prompting the Court to intervene. Citing the case law precedent, the Court emphasized that interest is warranted for the unauthorized withholding of funds. The Court directed the respondents to pay the refund amount of Rs. 2,21,910.30p along with simple interest at 12% per annum from the date of the Collector (Appeals) order in 1983 until the actual payment, within two weeks of the Court's order. In conclusion, the Court found the Customs Authorities' delay in refunding the amount to be unwarranted and illegal, justifying the award of interest to the petitioner. The judgment serves as a reminder of the obligation to promptly refund duties rightfully owed, especially after a favorable appellate decision.
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