Tag: #AtcorpGlobalPvt.Ltd.

Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 19.08.2026

CESTAT Kolkata Orders 12% Interest on Delayed Customs Refund

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, recently delivered a significant judgment in the case involving M/s Atcorp Global Pvt. Ltd. and the Commissioner of Customs (Port), Kolkata. The dispute centered on the rate and period of interest payable on a substantial customs duty refund, highlighting key legal principles and procedural delays in customs administration.

Background of the Case

• Parties Involved:
  • Appellant: M/s Atcorp Global Pvt. Ltd.
  • Respondent: Commissioner of Customs (Port), Kolkata
• Nature of Dispute:
  • Atcorp Global imported Yellow/Green peas between December 2017 and February 2018, initially paying 50% Basic Customs Duty (BCD).
  • Later, they discovered eligibility for NIL BCD under Notification No. 93/2017-Cus dated 21.12.2017 and sought re-assessment and refund of excess duty paid.
  • The refund process was marred by significant delays and multiple rounds of litigation.

Chronology of Events

1. Import and Duty Payment:
   • Goods imported under five Bills of Entry (Dec 2017–Feb 2018).
   • Excess duty paid due to initial misclassification.
2. Re-assessment Request:
   • Application for re-assessment filed on 18.09.2018 under Section 149 of the Customs Act, 1962.
   • No timely response from Customs authorities.
3. Refund Claim:
   • Refund application filed on 19.11.2018.
   • Initial rejection due to pending re-assessment.
4. Litigation and Delays:
   • Multiple appeals and reminders from 2019 to 2025.
   • Final re-assessment order passed only on 17.09.2025.
   • Refund of Rs. 2,89,56,399 sanctioned on 01.12.2025, credited on 20.01.2026.
5. Interest Dispute:
   • Commissioner (Appeals) granted interest at 6% from 20.02.2019.
   • Atcorp Global appealed for 12% interest, citing consistent High Court and Tribunal precedents.
   • Revenue appealed, arguing interest should accrue only from the date of re-assessment.

Legal Issues and Arguments

1. Date from Which Interest is Payable

• Importer’s Stand: Interest should accrue from three months after the initial refund application (i.e., from 20.02.2019), as per Supreme Court rulings (Ranbaxy Laboratories Ltd. vs. Union of India).
• Revenue’s Stand: Interest should start only after re-assessment (17.09.2025).

2. Applicable Rate of Interest

• Importer’s Stand: Sought 12% interest, referencing multiple High Court and Tribunal decisions (e.g., Riba Textiles Ltd., Green Valley Industries Pvt. Ltd., Parle Agro Pvt. Ltd.).
• Revenue’s Stand: Argued for 6% interest, citing statutory provisions and notifications.

Tribunal’s Analysis and Findings

• Delay Attributed to Revenue: The Tribunal noted that the delay in re-assessment and refund was due to inaction by Customs authorities, not the importer.
• Interest Period: Following Supreme Court precedents, the Tribunal held that interest is payable from three months after the refund application date (20.02.2019), not from the date of re-assessment.
• Interest Rate: The Tribunal relied on recent High Court and Tribunal rulings, especially the Calcutta High Court’s decision in Rajendra Kumar Jain vs. Commissioner of Customs (Port), Kolkata, which established 12% as the appropriate rate in the absence of a statutory provision for pre-deposit refunds.

Key Judgments Cited

• Ranbaxy Laboratories Ltd. vs. Union of India (2012): Interest on delayed refunds accrues from three months after the refund application.
• Sandvik Asia Ltd. vs. CIT, Pune: Compensation for inordinate delay in refund, supporting higher interest rates.
• Recent High Court/Tribunal Decisions: Consistently awarded 12% interest in similar cases (Riba Textiles Ltd., Green Valley Industries Pvt. Ltd., Parle Agro Pvt. Ltd., Berger Paints India Ltd.).

Final Order and Impact

• Revenue’s Appeal Dismissed: Tribunal upheld that interest is payable from 20.02.2019.
• Importer’s Appeal Allowed: Tribunal enhanced the interest rate from 6% to 12% for the period from 20.02.2019 until the date of refund.
• Direction: Revenue to pay the balance 6% interest within eight weeks of the order.

Significance of the Ruling

1. Clarifies Interest Computation: Reinforces that interest on delayed customs refunds accrues from three months after the refund application, not from the date of re-assessment.
2. Sets Precedent for Higher Interest: Affirms 12% as the appropriate rate in cases of administrative delay, especially where no statutory rate is prescribed.
3. Accountability for Delays: Highlights the need for timely action by customs authorities and provides compensation for importers facing undue delays.

Conclusion

The CESTAT Kolkata’s decision in the Atcorp Global case is a landmark for importers seeking timely refunds and fair compensation for administrative delays. It underscores the judiciary’s commitment to upholding statutory rights and ensuring accountability in customs administration.

Connected Matter

Interest for Delayed Refund of Pre-Deposit in Customs

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Source: CESTAT Kolkata

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