ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 01.11.2025
CESTAT Delhi- Refund Interest Must Be Paid Directly to Importer Not Credited to Consumer Welfare Fund
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.β
In a significant legal victory, Micromax Informatics Limited has successfully challenged the decision of the Commissioner of Customs (Appeals) regarding the refund and interest on excess countervailing duty (CVD) paid during the import of mobile handsets in 2014-2015. The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has ruled in favor of Micromax, allowing the company to receive both the principal refund amount and the interest accrued on delayed payments. β
Background of the Case
Micromax Informatics Limited had imported mobile handsets during 2014-2015 and paid CVD at a higher rate without availing exemption under a specific notification. β Following a Supreme Court ruling in the case of M/s SRF Ltd vs. Commissioner of Customs, Chennai, Micromax filed five refund applications for the excess duty paid. β The Assistant Commissioner sanctioned the refund of the principal amount with interest but directed the funds to be credited to the Consumer Welfare Fund, citing unjust enrichment. β
The Department challenged the payment of interest in four appeals before the Commissioner (Appeals), who subsequently set aside the Assistant Commissioner’s orders regarding interest. β Micromax, on the other hand, filed appeals against the decision to credit the refund amount to the Consumer Welfare Fund.
Key Developments
- Delhi High Court Intervention: Micromax filed a writ petition before the Delhi High Court, challenging the decision to credit the refund to the Consumer Welfare Fund. During the pendency of the petition, Micromax also filed appeals before the Commissioner (Appeals). β
- Commissioner (Appeals) Decision: On March 9, 2022, the Commissioner (Appeals) ruled in favor of Micromax, stating that the principal refund amount should be paid to the company instead of being credited to the Consumer Welfare Fund. β However, the Commissioner (Appeals) did not sanction interest for four refund applications, which led Micromax to file appeals before the CESTAT.
- CESTAT Ruling: On October 27, 2025, the CESTAT ruled in favor of Micromax, setting aside the earlier order and allowing the company to receive interest on the principal refund amount. The Tribunal emphasized that since the principal amount was directed to be credited to Micromax’s account, the interest on delayed payment should also be credited to the company.
Implications of the Judgment
This decision is a landmark ruling for businesses dealing with customs and excise matters. It reinforces the principle that when a refund is sanctioned, the rightful claimant is entitled to both the principal amount and the interest accrued due to delays. β The judgment also highlights the importance of challenging decisions that may not align with legal precedents or established laws.
Conclusion
The CESTAT’s decision in favor of Micromax Informatics Limited sets a precedent for similar cases, ensuring that businesses are not unfairly deprived of their rightful refunds and interest. This case underscores the importance of pursuing legal remedies to protect business interests and uphold justice in matters of taxation and customs.
Source: CESTAT Delhi
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