Ajay Industrial Corporation Ltd Vs Deputy Commissioner of Customs (Bombay High Court)
Bombay High Court held that interest in terms of Section 27 and 27A of the Customs Act, 1962 is payable from the date of receipt of the application for refund and not from the date of passing of the order of refund.
Facts- The petitioner manufactures various products related to water management. On 4th August 2014, the petitioner filed a claim for a refund of SAD in the amount of Rs.7,40,458/- under notification No. 102/2007–Cus dated 14 September 2007. The respondent rejected the above application by order in the original dated 17 February 2017. Aggrieved, the petitioner appealed to the Commissioner (Appeals) vide Appeal No. 403 of 2017.
The Commissioner (Appeals) allowed the petitioner’s appeal, set aside the original order dated 16 October 2020 and remanded the matter to the respondent to consider the petitioner’s refund application.
After a delay of almost ten years since the petitioner filed the refund application dated 04 August 2014, the respondent made an order dated 01 April 2024, by which the refund of Rs.7,40,458/- was allowed. However, the respondent failed to award any interest on the delayed refund. The petitioner has pleaded that there was a delay of 09 years and 182 days since the petitioner applied for a refund on 04 August 2014. Therefore, the petitioner was entitled to interest at 6% per annum on the delayed refund amounting to Rs. 4,21,940/-.
