January 30, 2026 : The Delhi Bench of the Customs Excise and Service Tax Appellate Tribunal has held that an importer is entitled to interest at the statutory rate of 6 percent per annum on a delayed customs refund, even where the delay extended to nearly eight years due to departmental inaction.
The ruling was delivered by Dr. Rachna Gupta, Judicial Member, in Customs Appeal No. 51596 of 2025, filed by Savi Vision Pvt. Ltd. against the Commissioner of Customs (Preventive), New Delhi .
The dispute arose from a customs investigation initiated in 2005 alleging mis-declaration of the maximum retail price of imported goods to evade duty. A show cause notice issued in July 2005 culminated in confirmation of demand in April 2009. During appellate proceedings, the assessee deposited amounts between 2005 and 2010 totaling ₹41.93 lakh, including a ₹35 lakh pre-deposit made pursuant to directions of the Delhi High Court.
In August 2015, the Tribunal set aside the original demand and remanded the matter for limited recomputation. Despite the remand attaining finality, the department failed to act for more than eight years, compelling the assessee to invoke Rule 41 of the CESTAT Procedure Rules, 1982. The demand was finally recomputed in March 2021, and a refund claim for ₹30.73 lakh was filed in August 2023. While the refund was sanctioned in May 2024, no interest was granted initially.
On appeal, the Commissioner (Appeals) allowed interest from the date of deposit till the date of refund, but restricted the rate to 6 percent per annum under Notification No. 70/2014-Cus. Challenging only the rate of interest, the assessee argued before the Tribunal that the extraordinary delay warranted compensatory interest at 12 percent and relied on earlier Tribunal decisions granting higher rates.
Rejecting the plea, the Tribunal held that it is a creature of statute and bound by the rate prescribed under the statutory framework. It noted that interest on customs refunds is governed by notifications issued under provisions pari materia to Section 11BB of the Central Excise Act, and that Notification No. 70/2014-Cus. expressly fixes the rate at 6 percent per annum. Equitable considerations, even in cases of prolonged departmental delay, cannot override the statutory mandate.
The Bench also distinguished the decisions relied upon by the appellant, observing that either the relevant notification had not been considered in those cases or the factual context was materially different. Upholding the Commissioner (Appeals)’ order, the Tribunal dismissed the appeal and confirmed that the assessee was entitled only to interest at 6 percent per annum from the date of deposit till the date of refund, notwithstanding the eight-year delay.
