Case Law Details
Raj Kumar Batra Vs Commissioner of Customs (Preventive) (Delhi High Court)
Introduction: In a landmark decision, the Delhi High Court in the case of Raj Kumar Batra Vs Commissioner of Customs (Preventive), has underscored the entitlement of assessees to interest on delayed refunds under Section 27-A of the Customs Act. This ruling highlights the judiciary’s stance on ensuring that traders are not disadvantaged by the undue retention of refunds by the customs authorities.
Detailed Analysis: Raj Kumar Batra, a trader of musical gadgets, sought a refund of a pre-deposit amount and seized cash, along with applicable interest, following a favorable order from the Customs Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi. The dispute centered on whether Batra was entitled to interest on the entire deposit made for the release of seized goods and on the seized currency.
The customs department argued that interest should only be paid on the statutory pre-deposit amount required for filing an appeal, not on the entire deposit. They also contended that since the seized currency was not deposited in the Government Exchequer but was held as case property, it did not qualify for interest under the Customs Act.
The Delhi High Court, however, pointed out that the revenue cannot enrich itself at the expense of the petitioner. It recognized that the petitioner is entitled to interest on the entire deposit amount, as the retention of these funds without right implies an obligation to refund with interest. The court relied on precedents to affirm that a refund owed to an assessee is a debt payable by the Revenue, including interest for the period of undue retention.
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