Hindustan Distributors Vs Commissioner of Customs (CESTAT Chandigarh)
Summary: The Chandigarh Regional Bench of the Customs, Excise and Service Tax Appellate Tribunal allowed both appeals filed by M/s Hindustan Distributors and held that the appellant was entitled to interest at 12% per annum from the date of the revenue deposit until actual payment of the refund. The appeals concerned interest on amounts deposited as redemption fine for redeeming imported goods.
The two appeals arose from separate orders of the Commissioner (Appeals), Ludhiana. The issue in both matters was identical, and the Tribunal therefore treated Customs Appeal No. 60490 of 2025 as the lead case. The refund amounts involved were Rs. 18,00,000/- in Appeal No. C/60490/2025 and Rs. 27,00,000/- in Appeal No. C/60519/2025.
The appellant was a proprietorship firm engaged in importing iron and steel products falling under the freely importable category. The Director General of Foreign Trade, through Notification No. 38/2015-2020 dated 05.02.2016, imposed a Minimum Import Price restriction. The appellant filed three Bills of Entry on 26.02.2016 and responded to an EDI query on 01.03.2016 by contending that the restrictive notification did not apply.
Following the initial adjudication, the appellant appealed before the Commissioner (Appeals). By Order-in-Appeal dated 27.07.2023, the confiscation and redemption fine of Rs. 18 lakh were set aside, although the penalty was upheld. The appellant consequently filed a refund claim on 23.08.2023 for the Rs. 18 lakh redemption fine. The respondent sanctioned the refund by Order-in-Original dated 30.01.2024 but rejected interest under Section 27A of the Customs Act, 1962, reasoning that the refund had been sanctioned within three months from the application.
