FINAL ORDER NO. 50860-50861/2026

DATE OF HEARING :11.03.2026

DATE OF DECISION:30.04.2026

P.V. SUBBA RAO

M/s EMD Locomotive Technologies Pvt. Ltd. (now known as Progress Rail Innovations Private Limited)^{1the appellant} filed these two appeals to assail the order dated 15.05.2023 passed by the Commissioner (Appeals) upholding the orders dated 06.12.2019 and 16.12.2019 passed by the Assistant Commissioner and rejecting the appellant’s appeals.

2. We have heard learned counsel for the appellant and learned authorized representative for the Revenue and perused the records.

Submissions of the appellant

3. Learned counsel for the appellant took us to the facts of the case which are as follows:-

(i) On 16.09.2016 the officers of Directorate of Revenue Intelligence^2DRI visited the appellant’s premises and initiated investigation and felt that the appellant was not entitled to exemption under India-Japan Comprehensive Economic Partnership Agreement for the goods that it had imported. According to the learned counsel, the officers of DRI compelled the appellant to deposit an amount of Rs. 12 crores during this visit itself, towards any future duty liability that may arise as a result of their investigation and the appellant did.

(ii) After three months, on 16.12.2016, the DRI issued show cause notice (SCN I) demanding differential duty of Rs. 5,51,55,242/- along with interest in respect of 14 Bills of Entry cleared between 18.12.2014 and 17.10.2016.

(iii) After another two months, on 21.02.2017 DRI issued a second SCN II proposing demand of differential duty with interest amounting to Rs. 36,83,481/- in respect one Bill of Entry dated 11.03.2015.

(iv) After another 9 months, i.e. on 03.11.2017 DRI issued a third SCN(SCN-III) including the demands in the SCNs I & II as well as demands in respect of Bills of Entry which were provisionally assessed after 17.10.2016, demanding the total differential duty of Rs. 11,97,47,409/- along with interest and penalties.

(v) The Additional Director General^3ADG, DRI, adjudicated SCN III and confirmed demand of duty of Rs. 9,85,10,239/- and also imposed penalty of Rs. 11 lakhs on the appellant and ordered appropriation of the amount of Rs. 12 crores paid by the appellant during investigation. However, the amount was not appropriated nor have the provisional assessments have been finalized.

(vi) Aggrieved by the order of the ADG, DRI, the appellant filed an appeal before this Tribunal and by Final Order dated 09.08.019, the order of the ADG DRI was set aside with consequential relief to the appellant. Revenue’s Civil Appeal against the order of this Tribunal was dismissed by the Supreme Court on 09.09.2024 (Civil Appeal No. 2821-2824/2021) and thus, the issue attained finality in favour of the appellant.

(vii) Thereafter, the appellant filed a refund claim for the amount of Rs. 12 crores which it had deposited during the investigation along with interest.

(viii) On 06.12.2019, the Assistant Commissioner sanctioned a refund of only Rs. 73,88,268/- (out of Rs. 12 crores) along with interest calculated from 02.05.2019 (on which date the appellant had filed the appeal before CESTAT) till 06.12.2019. In deciding so, the Assistant Commissioner considered only 7.5% of the duty confirmed by the ADG as pre-deposit within the meaning of section 129E of the Customs Act, 1962^{4the Act} and accordingly paid the refund and interest.

(ix) On 10.12.2019, the appellant was asked by the department to file a refund claim under section 27 for the remaining amount and the appellant did.

(x) On 16.12.2019 the refund was sanctioned under section 27 of the Act without any interest.

(xi) Aggrieved by the two orders of the Assistant Commissioner in which interest was sanctioned only for a limited period in one case and none at all in the other the appellant filed two appeals before the Commissioner (Appeals).

(xii) On 15.05.2023 the Commissioner (Appeals) passed the impugned order rejecting both the appeals and upholding the orders o