CESTAT Mumbai Orders Interest on Refund of Seized Traveller’s Cheques

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 25.04.2025

CESTAT Mumbai Orders Interest on Refund of Seized Traveller’s Cheques

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench ruled in favor of M/s Sohail Maklai Entertainment Pvt. Ltd., directing the Customs Department to pay interest on the refund of ₹47.86 lakhs, which was encashed from 106 traveller’s cheques seized back in 2006.

Case Background:

• On 19.10.2006, Customs officials at CSI Airport, Mumbai seized 106 traveller’s cheques from a passenger.
• The cheques, amounting to USD $1,07,642 (equivalent to ₹47,86,334), were deposited in the State Bank of India.
• After prolonged litigation, redemption fine and penalties totaling ₹10.01 lakhs were deducted.
• The remaining ₹41.85 lakhs was refunded, but no interest was paid on the retained amount.
• The company sought interest on the refunded amount and alternatively, foreign exchange rate-adjusted compensation.

This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

Source: CESTAT Mumbai

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