When duty is collected without authority of law and a refund becomes due upon a judicial ruling, interest on such refund is payable from the date of deposit, and the settled rate of interest as per consistent judicial pronouncements is 12% per annum.

Per Bench :

Brief and relevant facts of this Appeal filed by Revenue against the order of Commissioner of Customs (Appeals-II), Chennai are that the Respondent/Competition Team Technology India Pvt. Ltd. (CTTPL) is engaged in the manufacture of Television sets, for which 'LED Panels' were imported by classifying the same under CTH 90138010, which was disputed by the Revenue. The Respondent, upon each import, appears to have cleared the goods though under CTI 85299090 as insisted by the Revenue by paying duty however, under protest. The above resulted in the litigation which travelled upto Hon'ble Apex Court which confirmed the CTI adopted by the Respondent. In terms of judgment of the Hon'ble Apex Court and in compliance with the directions therein the Revenue appears to have reassessed 919 Bills of Entry and thereafter, the Respondent filed a refund application on 13.06.2024 seeking refund of excess duty paid by them and the same appears to have been sanctioned vide Order-in-Original No.10/2024 dt. 24.06.2024, it is a matter of record that the said Order-in-Original was accepted by the Revenue without any challenge.

2. The Respondent thereafter, appears to have made another request for sanctioning of interest as well, since no interest was sanctioned by the sanctioning Authority in the above Order-in-Original. The Adjudicating Authority having considered the above request for interest, however, vide Order-in-Original No.25/2024 dt. 31.08.2024 rejected the claim of interest on the refund. A perusal of the said Order-in-Original inter alia reveals that the Adjudicating Authority believed that the claim by the Respondent was not covered under the specific provisions under the Customs Act, 1962 which expressly provides for only 4 types of interest to be paid by the Department i.e.

(a) Section 18 (4) – Interest on account of finalization of provisionally assessed Bill of Entries.

(b) Section 27A – Interest on delayed refunds; after 3 months from the date of refund application,

(c) Section 75A – Interest on delayed disbursal of drawback,

(d) Section 129E E – Interest on delayed refund of amount deposited under Section 129E i.e., pre-deposit.

Further, the Adjudicating Authority has also relied on the following decisions :

(i) Judgement dt. 08.11.2023 (in W.P (L) No.24184 of 2023) of Hon'ble High Court Bombay in the case of The Hongkong and Shanghai Banking Corporation Ltd. vs UOI & Others.

(ii) Principal Commissioner Vs Green Valiey Industries Pvt Ltd. (2023) 10 Centax 117 (Meghalaya)

(iii) Hon'ble Madras High Court judgement in CCE Chennai Vs UCAL Fuel Systems Ltd.

(iv) Sunrise Immigration Consultants Pvt. Ltd. Vs CG & ST Chandigarh (ST Appeal No.60347 of 2022)

(v) Fujikawa Power Vs CCE & ST, Chandigarh ([2024) 16 Centax 310 (Tri.-Chan.)

(vi) Hon'ble Kerala High Court decision in Sony Pictures Networks India Pvt. Ltd. 2017 (353) ELT 179 (Ker.)

(vii) Ebiz. Com. Pvt. Ltd. Vs CCE, Customs & ST [2017 (49) STR 389 (All.)]

(viii) Indore Treasure Market City Pvt. Ltd. Vs CGST & CE [Final Order No.50125/2024 dt. 11.01.2024]

(ix) Shahi Exports Ltd. Vs CCE & ST Gurgaon [Final Order No.60875/2021 dt. 16.08.2021 –CESTAT Chandigarh]

(x) Gautam Industries Vs CCE & ST (CESTAT Chandigarh) [Excise Appeal No.60432 of 2020 – CESTAT Chandigarh]

3. Aggrieved by the above rejection order, the Respondent appears to have approached the First Appellate Authority and the First Appellate Authority vide impugned Order-in-Appeal C.Cus. II No.19/2025 dt. 06.01.2025, after analysing various judicial pronouncements on the issue, has allowed the Appeal with a direction to grant refund with an interest at 12% per annum from the date of deposit. It is against this order that the present Appeal has been filed by the Revenue.

4. Heard Shri