The CESTAT ruled that Customs must pay interest on delayed refunds of Extra Duty Deposit, emphasizing that delays attract statutory interest regardless of litigation.
Interest Liability on Delayed Customs Refunds
The CESTAT Mumbai has concluded that Customs is liable to pay interest under Section 27A for delays in refunding Extra Duty Deposits (EDD) following final assessments. The Tribunal emphasized that the statutory provision mandates the payment of interest where refunds are not issued within the prescribed three-month period after refund-determining orders.
The judgment indicates that delays in payment due to ongoing litigation do not absolve the customs authorities from their obligation to provide timely refunds accompanied by interest. This reinforces the principle that taxpayers are entitled to financial recourse for government-induced delays.
For practitioners, this ruling is critical as it clarifies the expectations for timely processing of customs refunds, emphasizing the importance of monitoring refund timelines to ensure compliance with statutory interest provisions.
Citations
- CESTAT Mumbai Order (2026) Vol. 1 Reporter 128
