Case Law Details
Nanda Agency House Shipping Services Pvt Ltd Vs Commissioner of Customs (CESTAT Chennai)
Introduction: The Nanda Agency House Shipping Services Pvt Ltd Vs Commissioner of Customs case decided by CESTAT Chennai presents significant questions regarding interest rates on delayed customs duty refunds.
Delay in Refund and the Request for Enhanced Interest: Nanda Agency had imported a “Glass Bottom Boat Looker 350” and was initially charged a significant customs duty based on what the department considered to be the “correct classification” of the product. Upon reclassification, Nanda Agency was entitled to a refund, which was delayed by 253 days. Following this, they filed another application seeking interest on the delayed refund.
Arguments from Nanda Agency: The appellant, represented by Ms. Madhumitta Bagchi, argued that the delay had caused them immense financial burden. The loan taken to pay the original duty was at an interest rate of 12.45%, and the delay had further led to borrowing from private financiers. They requested an enhanced interest rate of 9% due to these constraints.
Government’s Standpoint: The government, represented by Ld. A.R Sri R. Rajaraman, argued that interest should only be paid after a 3-month delay from the date of the refund application and that the 6% rate was appropriate as per Section 27A of the Customs Act, 1962.
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