2004 (2) TMI 80 - HC - Customs

Strictures against Customs authorities - Refund, delay in payment - Departmental clarification - Interest, refund (Customs)

Summary

Issues involved:
Claim for refund of customs duty along with interest, delay in issuing refund order, entitlement to claim interest for delayed payment of refund amount.

Analysis:
The petitioner, a company, imported computer software which was seized by the Directorate of Revenue Intelligence under the Customs Act, 1962. After a show cause notice, the respondent imposed fines, penalties, and customs duty on the petitioner. The bank guarantee of Rs. 7,08,050 was encashed by the respondent. The petitioner appealed to the Tribunal, which allowed the appeal, directing the respondent to refund the encashed amount. Despite multiple requests and submissions of required documents by the petitioner, the refund was not processed promptly by the respondent.

The Court noted the indifferent attitude of the respondent in handling refund claims, emphasizing the need for timely processing of such claims. Referring to a circular issued by the Board, it highlighted the obligation to expedite refund claims and pay interest if not refunded within three months. The Court criticized the respondent for not adhering to the circular's directives, leading to delays in refunding the petitioner's amount.

Considering the delay in issuing the refund order without any justification, the Court held the respondent liable to pay interest to the petitioner. The Court allowed the writ petition, directing the respondent to pay simple interest at 12% per annum on the refund amount from the date of the Tribunal's order till the actual payment date. The respondent was instructed to pay the interest within four weeks and also bear the petitioner's legal costs.

The Court's decision highlighted the importance of timely refund processing, criticized the respondent's negligent behavior, and emphasized the obligation to pay interest for delayed refunds as per legal provisions and circulars. The judgment aimed to ensure accountability and promptness in dealing with refund claims under the Customs Act, ultimately benefiting the petitioners in receiving their rightful dues along with interest.