2019 (6) TMI 752 - HC - Customs

Interest on delayed refund - Section 27A of the Customs Act - HELD THAT - A First Bench of the Delhi High Court in Hewlett Packard India Limited V. Union of India 2006 (3) TMI 160 - HIGH COURT OF DELHI dealing with the claim of interest on the belated refund directed the concerned custom authorities to compute the amount of interest and pay the same to the petitioner. The petitioner is entitled for interest not only on the amount already refunded but also on the amount of 53, 583/- qua which note was not drawn and was omitted from refund - Petition allowed.

Summary

Issues:
Challenge to Order in Original for refund, Delay in refund process, Entitlement to interest under Section 27A of the Customs Act.

Analysis:
1. The petitioner challenged Order in Original No.48134/16 seeking refund and interest on duty paid for importing fruit juice. The goods were initially assessed under one classification but later found to be exempt from CVD under a different classification.

2. The Adjudicating Authority allowed the refund claim on 22.05.2006. The Revenue's subsequent appeals were dismissed, leading to delayed refund processes. The petitioner highlighted a clerical error in refunding a specific amount, resulting in outstanding refund and significant delay.

3. The petitioner invoked Section 27A of the Customs Act due to the delay in refund. The respondent rejected the claim, citing timely completion of the refund process as per regulations. The petitioner contended that interest on delayed refunds is a statutory duty under Section 27A.

4. The petitioner relied on judicial precedents, including decisions from various High Courts and the Supreme Court, emphasizing that delay in refund attracts interest. The courts have consistently upheld the entitlement to interest on belated refunds under relevant statutory provisions.

5. Considering the legal principles and precedents, the Court ruled in favor of the petitioner. The impugned order was quashed, directing the respondent to refund the outstanding amount and pay interest on the total refund amount. The Court specified the interest rate and timeline for the refund, ensuring compliance with statutory provisions and judicial interpretations.

6. The judgment clarified the legal position regarding delayed refunds and the obligation to pay interest under Section 27A of the Customs Act. It underscored the importance of timely and accurate refund processes, aligning with established legal principles and precedents from higher courts.