The petitioner is entitled to interest at 6% per annum on delayed refund from the date of application, as per statutory provisions of the Customs Act.

JUDGMENT :

M.S. SONAK, J.

1. Heard learned counsel for the parties.

2. Rule. The rule is made returnable immediately at the consent of and at the request of the learned counsel for the parties.

3. The petitioner seeks a writ of mandamus directing the respondent to pay interest at the rate of 6% per annum on the delayed refund of Special Additional Duty (“SAD”) in terms of Sections 27 and 27A of the Customs Act, 1962 (“Customs Act”).

4. The petitioner manufactures various products related to water management. On 04 August 2014, the petitioner filed a claim for a refund of SAD in the amount of Rs.7,40,458/- under notification No. 102/2007-Cus dated 14 September 2007. The respondent rejected the above application by order in the original dated 17 February 2017. Aggrieved, the petitioner appealed to the Commissioner (Appeals) vide Appeal No. 403 of 2017.

5. The Commissioner (Appeals) allowed the petitioner’s appeal, set aside the order dated 17 February 2017 and remanded the matter to the respondent to consider again the petitioner's representation/application dated 04 August 2014. The respondent, by yet another order in original dated 16 October 2020, once again rejected the petitioner's claim for refund. The petitioner, once again, appealed to the Commissioner (Appeals) vide Appeal No. 1858 of 2020.

6. The Commissioner (Appeals) vide order dated 30 June 2022, once again allowed the petitioner's appeal, set aside the original order dated 16 October 2020 and remanded the matter to the respondent to consider the petitioner's refund application.

7. Despite the above, the respondent kept delaying disposing of the petitioner's refund application dated 04 August 2014. This forced the petitioner to file a grievance/complaint dated 15 September 2023 on the CPGRAMS portal. In response, the respondent called up the petitioner's counsel and admitted having misplaced the files relating to the petitioner's claim. The respondent has also sent an email dated 25 September 2023 to the petitioner’s counsel requesting to supply documents so that the petitioner's refund claim application dated 04 August 2014 could be disposed of.

8. Despite furnishing all documents and case papers respondent did not bother to dispose of the petitioner’s refund claim application. Since the petitioner faced similar problems in recovering interest on delayed refunds in six identical cases, the petitioner instituted Writ Petition (C) No. 773 of 2024 before this court. By order dated 19 March 2024, this court directed the respondent to decide the interest claimed within four weeks.

9. After a delay of almost ten years since the petitioner filed the refund application dated 04 August 2014, the respondent made an order dated 01 April 2024, by which the refund of Rs.7,40,458/- was allowed. However, the respondent failed to award any interest on the delayed refund. The petitioner has pleaded that there was a delay of 09 years and 182 days since the petitioner applied for a refund on 04 August 2014. Therefore, the petitioner was entitled to interest at 6% per annum on the delayed refund amounting to Rs. 4,21,940/-.

10. Section 27 of the Customs Act deals with the refund of duty. Section 27A deals with the interest on delayed refunds.

Section 27A of the Customs Act reads as follows:

“27A. Interest on delayed refunds - If any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent and not exceeding thirty per cent per annum as is for the time being fixed by the Central Government by Notification in the Official Gazette, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty:

Provided that where any duty, ordered to be refunded under sub-section (2) of section 27 in respect o