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M. S. SONAK, JITENDRA JAIN
Ajay Industrial Corporation Ltd. – Appellant
Versus
Deputy Commissioner of Customs, CRC-I, JNCH – Respondent
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 cl
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.
The court ruled that entitlement to interest on refund under the Customs Act requires proper application in statutory form, with interest only applicable post-crystalization of the refund amount.
Appellant entitled to interest on delayed refund as per Sections 11B and 11BB of the Central Excise Act, which specifically governs the timing and rate of interest applicable.
Since the provisions of section 11B of the Act are not applicable to the claim of refund made by the petitioner, the limitation prescribed under the said provision would also not be applicable and th....
The central legal point established in the judgment is the determination of the applicability of Section 27A of the Customs Act, the grant of interest on the belated refund of Special Additional Duty....
The main legal point established in the judgment is that interest on delayed refunds is a statutory liability under Section 11BB of the Central Excise Act, 1944, and becomes payable if the duty order....
In tax matters, entitlement to interest on delayed refunds, including on interest accrued, is affirmed, highlighting the principle that overdue amounts accrue additional interest.
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