ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 26.08.2025
CESTAT Kolkata Set Aside Interest Demand on Provisional Refunds β β β β β β β
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, has delivered a judgment that provides relief to M/s. Godrej Consumer Products Ltd. (GCPL) in a long-standing dispute over provisional refunds and interest liability. β The case revolved around the refund of excise duty under area-based exemption notifications and the subsequent demand for interest on provisional refunds sanctioned to the company. This decision sets a precedent for similar cases and highlights the importance of adhering to statutory provisions and principles of natural justice. β
Background of the Case
GCPL had set up manufacturing units in Assam and was availing 100% refund of duty paid under Notification No. β 20/2007-CE. However, an amendment via Notification No. 20/2008-CE restricted the refund to 34% of the total duty paid, with an option for manufacturers to apply for special value addition rates. β GCPL challenged the amended notification before the Gauhati High Court, which initially struck it down. β The matter eventually reached the Supreme Court, which upheld the validity of the amended notification. β
During the litigation, GCPL was granted provisional refunds amounting to Rs. β 24,00,07,627/- based on interim orders from the Gauhati High Court and Supreme Court. β After the Supreme Court’s final decision, the Department adjusted these refunds against the amounts determined under special value addition rates, leaving a net excess refund of Rs. β 50,96,571/-.
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 Kolkata
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