Tag: #Refunds

Delhi High Court Orders Immediate GST Refund: Upholding Taxpayer Rights and Rule of Law

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

Date: 07.09.2026

Delhi High Court Orders Immediate GST Refund: Upholding Taxpayer Rights and Rule of Law

This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email id jhamadhumita27@gmail.com .

The Delhi High Court recently delivered a significant judgment in the case of Brij Mohan Mangla vs. Union of India & Ors., addressing the issue of delayed GST refunds and the obligations of tax authorities to comply with appellate orders. This article provides a comprehensive overview of the case, its background, the legal proceedings, and the implications for taxpayers and authorities under the GST regime.

Background of the Case

Brij Mohan Mangla, a manufacturer of liquid printing inks, was registered under the Central Goods and Services Tax Act, 2017 (GST Act). During the period from May 2019 to December 2019, he accumulated an input tax credit (ITC) of ₹74,02,337 due to an inverted duty structure, which occurs when the tax rate on inputs is higher than the tax rate on outputs. Unable to utilize the ITC fully, Mangla filed six separate refund applications for the relevant period.

Timeline of Refund Applications

Date of Filing	Period	Amount (INR)
09.12.2020	May 2019	8,89,402
23.12.2020	June 2019	7,39,443
07.01.2021	July 2019	10,62,596
07.01.2021	August 2019	11,12,574
22.01.2021	September 2019	9,72,486
16.03.2021	Oct–Dec 2019	26,25,836
Total		74,02,337

Initial Rejection and Appeals

The refund claims were not processed. Instead, the authorities issued show cause notices, citing two main reasons for rejection:

Non-existence at Registered Premises: Physical verification allegedly found the business non-existent at the declared address.
Cancellation of GST Registration: The GSTIN was cancelled with effect from 19.02.2021.

Mangla responded, clarifying that he had shifted his business premises after the relevant period. Despite this, the refund applications were rejected on the grounds that he was not a “registered person” at the time of application, as required under Section 54(3) of the GST Act.

Mangla appealed these decisions. The Appellate Authority ruled in his favor, confirming that he was indeed a registered person during the relevant period and entitled to the refund. The Authority also directed restoration of his GST registration.

Continued Non-Compliance by Authorities

Despite the appellate orders, the authorities did not process the refunds. Instead, they issued deficiency memos and repeated the same objections already settled by the Appellate Authority. The authorities argued that they intended to appeal the appellate orders and thus withheld the refunds.

High Court’s Judgment

The Delhi High Court found the authorities’ conduct unacceptable, emphasizing the following points:

Obligation to Implement Appellate Orders: Authorities cannot ignore or withhold implementation of appellate orders merely because they intend to file an appeal, unless a stay is obtained.
Rule of Law: Allowing authorities to disregard appellate decisions undermines the rule of law.
Direction to Disburse Refunds: The Court directed the authorities to process and disburse the refunds, including applicable interest, without further delay.
Right to Appeal Preserved: The authorities retain the right to challenge the appellate orders, but must comply with them unless and until they are set aside.

Implications and Takeaways

For Taxpayers: This judgment reinforces the rights of taxpayers to timely refunds and the enforceability of appellate decisions.
For Authorities: Tax authorities must comply with appellate orders unless a stay is granted by a higher forum. Delays or non-compliance can be challenged in court.
For the GST Regime: The case highlights the importance of procedural fairness and the need for efficient dispute resolution mechanisms under GST.

Conclusion

The Brij Mohan Mangla case sets a precedent for the prompt implementation of appellate orders in GST matters. It serves as a reminder that administrative authorities are bound by the rule of law and must respect judicial and quasi-judicial decisions, ensuring justice for taxpayers.

Connected Matter

Bombay High Court Orders Refund of Pre-Deposit for Dropped GST Demand Despite Pending Appeal

Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

Source: Delhi High Court

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September 7, 2026

Interest for Delayed Refund of Pre-Deposit in Customs
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 20.08.2026

Interest for Delayed Refund of Pre-Deposit in Customs

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

A recent judgment by the Calcutta High Court in the case of Rajendra Kumar Jain vs. Commissioner of Customs (Port) Kolkata & Anr. has clarified the legal position regarding the rate of interest payable on delayed refunds of pre-deposits in customs matters. This article provides a detailed overview of the case, the legal arguments, and the implications for taxpayers and authorities.

Background of the Case
- Seizure and Pre-Deposit: On August 20, 1998, authorities seized Rs. 9,93,200 from Rajendra Kumar Jain, alleging it was the sale proceeds of goods liable for confiscation. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) later directed that this amount be treated as a pre-deposit under Section 129E of the Customs Act, 1962.
- Appeal and Refund: After a successful appeal, the confiscation and penalty were set aside, making the pre-deposit refundable. However, the refund was delayed, prompting the appellant to seek judicial intervention.
- Interest Dispute: The refund was eventually sanctioned with interest at 6% per annum. Dissatisfied, the appellant sought a higher rate, referencing Supreme Court and High Court precedents where 12% interest was awarded in similar circumstances.
Legal Issues and Arguments

Substantial Question of Law

The core legal question was:

“Whether the Learned Tribunal is justified in law in not allowing the interest at the rate of 12 per cent per annum on the refund amount of pre-deposit?”

Appellant’s Arguments
1. No Statutory Rate Pre-2008: At the time of the events, there was no statutory provision specifying the rate of interest for delayed refunds of pre-deposits.
2. Supreme Court Precedent: In Commissioner of Central Excise, Hyderabad v. ITC Limited (2005), the Supreme Court awarded 12% interest on delayed refunds.
3. High Court Consistency: The Calcutta High Court in Madura Coats Private Limited v. Commissioner of Central Excise, Kolkata – IV (2012) also granted 12% interest in a similar context.
4. Amendment Not Retrospective: The amendment to Section 35FF of the Central Excise Act (effective May 10, 2008) and subsequent notifications fixing interest at 6% per annum do not apply retrospectively.
Respondents’ Arguments
- The respondents contended that the seized amount was not originally a pre-deposit and that the applicable rate should be 6% as per later notifications.
- They acknowledged the absence of a statutory rate during the relevant period but argued for the lower rate based on subsequent government notifications.
Court’s Analysis and Findings
- Undisputed Facts: The Court noted that the amount was treated as a pre-deposit by CESTAT and that there was no statutory rate of interest for delayed refunds at the relevant time.
- Precedent Application: The Court relied on the Supreme Court’s decision in ITC Limited and its own earlier decision in Madura Coats, both of which awarded 12% interest in the absence of a statutory rate.
- Notification Not Retrospective: The notification fixing 6% interest (dated August 12, 2014) was held not to apply to periods before its issuance.
Final Judgment

The Calcutta High Court set aside the lower tribunal’s order and held that:
- The appellant is entitled to interest at 12% per annum on the delayed refund of the pre-deposit.
- The interest must be paid within one month from the date of production of the certified copy of the order.
Implications of the Judgment
1. Clarity for Taxpayers: Taxpayers whose refunds of pre-deposits were delayed before the statutory rate was notified can claim interest at 12% per annum, based on judicial precedent.
2. Guidance for Authorities: Customs authorities must follow judicial directions and precedents in similar cases, especially for periods before statutory rates were notified.
3. Legal Certainty: The judgment reinforces the principle that, in the absence of a statutory provision, courts may rely on precedent to ensure fairness and parity.
Conclusion

This ruling by the Calcutta High Court is a significant development in customs jurisprudence, ensuring that taxpayers are fairly compensated for delayed refunds of pre-deposits. It underscores the importance of judicial precedent in filling legislative gaps and provides clear guidance for both taxpayers and authorities in similar disputes.

Connected Matter

CESTAT Kolkata Orders 12% Interest on Delayed Customs Refund

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Source: Calcutta High Court

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August 20, 2026
Supreme Court Clarifies Extended Limitation in Excise Valuation for Motor Vehicle Body Building
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 18.08.2026

Supreme Court Clarifies Extended Limitation in Excise Valuation for Motor Vehicle Body Building

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Supreme Court of India recently delivered a significant judgment in the case of Audi Automobiles & Ors. vs. Commissioner of Central Excise and Service Tax, Indore, addressing the applicability of the extended period of limitation under Section 11A of the Central Excise Act, 1944, in disputes involving the valuation and assessment of motor vehicle chassis and body-building services.

Background of the Case

Audi Automobiles and other appellants are engaged in the business of body building for motor vehicles on a job work basis. Manufacturers supply them with chassis, on which the body is built. The excise duty on the chassis is paid by the manufacturer at 110% of the cost of manufacture, as per Rule 8 of the Central Excise Valuation Rules, 2000. Once the body is built, the completed vehicle is returned to the manufacturer, and excise duty is computed by the job worker on the total value, including the cost of raw materials, job work charges, and profit.

A dispute arose regarding whether the 10% profit margin (included in the 110% valuation of the chassis) should also be included in the assessable value when the job worker clears the completed vehicle. The Department issued a Show Cause Notice (SCN) demanding duty for the period 01.11.2004 to 31.03.2007, invoking the extended limitation period under Section 11A.

Key Legal Issues
1. Valuation of Completed Motor Vehicles
  - The core issue was whether the 10% profit margin, already included in the chassis valuation, should be added again when computing the assessable value of the completed vehicle.
  - The Supreme Court referred to earlier landmark decisions (such as Ujagar Prints and Eicher Motors) and clarified that the value of the completed vehicle must include the full value of the chassis (including the 10% margin), the cost of raw materials, job work charges, and the job worker’s profit. However, profits made by the manufacturer after receiving the completed vehicle are not to be included.
2. Applicability of Extended Limitation under Section 11A
  - The Department sought to invoke the extended limitation period, alleging suppression of facts by the assessee.
  - The Court emphasized that for the extended period to apply, there must be a wilful suppression or misstatement with intent to evade duty. Mere omission or non-inclusion, when facts are known to both parties, does not amount to suppression.
  - In this case, since the Department was aware of the valuation method and the 10% margin, the invocation of the extended limitation was not justified.
Supreme Court’s Decision
- The Supreme Court set aside the orders of the Tribunal and lower authorities, holding that the demand raised by the Department was time-barred as the SCN was issued beyond the one-year limitation period.
- The Court reaffirmed that the assessee’s liability to include the entire cost price (including the 10% margin) in the assessable value is correct, but the demand for the subject period could not be sustained due to limitation.
Implications of the Judgment
1. Clarity on Valuation: The judgment provides clear guidance on how to compute the assessable value for motor vehicles built on job work basis, ensuring that the 10% profit margin included in the chassis valuation is not omitted.
2. Limitation Safeguards: The decision reinforces the principle that the extended limitation period under Section 11A can only be invoked in cases of wilful suppression or fraud, protecting assessees from arbitrary and delayed demands.
3. Precedent for Similar Cases: This ruling will serve as a precedent for future disputes involving valuation and limitation in excise matters, especially in job work scenarios.
Conclusion

The Supreme Court’s judgment in the Audi Automobiles case brings much-needed clarity to the valuation of motor vehicles in body-building job work and sets strict standards for invoking the extended limitation period under the Central Excise Act. This ensures fairness and legal certainty for both the industry and the tax authorities.

Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

Source: Supreme Court

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August 18, 2026
Delhi HC Affirms Importers’ Right to Refund of Excess Customs Duty Paid Without Assessment Order u/s 27 of Customs Act
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 17.08.2026

Delhi HC Affirms Importers’ Right to Refund of Excess Customs Duty Paid Without Assessment Order u/s 27 of Customs Act

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

Aman Medical Products Ltd. found itself in a legal dispute after inadvertently paying a higher customs duty on imported goods. The company failed to claim a concessional rate available under Notification No. 6/2002 dated 1.3.2002 due to ignorance and paid the excess duty while filing the Bill of Entry. The central question was whether an importer who pays excess duty by mistake, without an assessment order or contest, can claim a refund under Section 27 of the Customs Act, 1962.

Legal Issue

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had previously ruled that a refund could only be claimed if the excess duty was paid “in pursuance to an order of assessment.” According to CESTAT, without an assessment order, the importer could not seek a refund unless an appeal was filed against such an order.

High Court’s Analysis

The Delhi High Court, presided over by Justices A.K. Sikri and Valmiki J. Mehta, examined Section 27 of the Customs Act, 1962. The Court highlighted two key points:
1. Alternative Grounds for Refund: Section 27(1) allows a refund claim for duty “paid by him in pursuance of an order of assessment” or “borne by him.” The use of “or” means these are alternative grounds. Thus, a refund can be claimed even if the duty was not paid under an assessment order.
2. No Assessment Order Required: The Court clarified that if duty is paid without an assessment order—such as in cases of ignorance or inadvertence—the importer is still entitled to claim a refund under Section 27(1)(ii).
The Court distinguished this case from earlier Supreme Court judgments (CCE, Kanpur v. Flock (India) Pvt. Ltd. and Priya Blue Industries Ltd. v. Commissioner of Customs), noting that those cases involved a formal assessment order and a failure to appeal, which was not the situation here.

Judgment and Outcome

The High Court set aside the CESTAT’s order and upheld the order of the Commissioner of Customs (Appeal). The matter was remanded to the Deputy Commissioner of Customs (Refund) to examine the merits of Aman Medical Products Ltd.’s refund claim. The Court confirmed that the company’s claim was maintainable under Section 27 of the Customs Act, even without an assessment order or a prior appeal.

Key Takeaways
1. Importers’ Rights: Importers who pay excess customs duty by mistake, without an assessment order, can claim a refund under Section 27(1)(ii) of the Customs Act.
2. No Appeal Requirement: The absence of an appeal against the Bill of Entry does not bar the importer from seeking a refund.
3. Legal Clarity: The judgment clarifies the scope of Section 27, ensuring that procedural technicalities do not prevent genuine refund claims.
This decision strengthens the rights of importers and provides clear guidance on the interpretation of refund provisions under Indian customs law.

Connected Matter

Delhi High Court Clarifies Limitation Law in Customs Refunds

Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

Source: Delhi High Court

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August 17, 2026
Delhi High Court Clarifies Limitation Law in Customs Refunds
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 14.08.2026

Delhi High Court Clarifies Limitation Law in Customs Refunds

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

A recent batch of appeals before the Delhi High Court has brought significant clarity to the application of limitation law in customs refund cases. Senior India Pvt Ltd, a prominent importer, challenged several orders of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding the classification of imported goods and the timeliness of their refund claims. This article provides a detailed overview of the case, the legal issues involved, and the implications of the Court’s decision.

Background of the Case

Senior India Pvt Ltd imported pressure relief valves, which were initially classified under Customs Tariff Item (CTI) 8481 40 00. From September 2018, the company began declaring these goods under CTI 8409 99 41 and paid a higher duty, reportedly at the insistence of Customs authorities. Fourteen Bills of Entry were assessed between September 2018 and February 2019, with two additional Bills in March and May 2019.

The legal landscape at the time, shaped by earlier Delhi High Court decisions, allowed importers to seek refunds under Section 27 of the Customs Act even if the assessment had not been appealed. Acting on this, Senior India filed two refund applications on 26 August 2019, within the statutory one-year period.

The Turning Point: Supreme Court Judgment in ITC Limited

While the refund proceedings were pending, the Supreme Court delivered a landmark judgment in ITC Limited v. Commissioner of Central Excise, Kolkata-IV (2019), holding that a refund claim could not be entertained unless the assessment was first modified in appeal. This fundamentally changed the legal basis for refund claims.

Within days, Senior India sought to amend the Bills of Entry under Section 149 of the Customs Act and requested that refund proceedings be kept in abeyance. However, the refund authority rejected one claim as premature, and the company subsequently filed appeals under Section 128, seeking exclusion of the period spent on the refund process from the limitation period, invoking principles from Section 14 of the Limitation Act.

Key Legal Issues

The High Court focused on two main questions:
1. Whether the authorities were justified in denying the benefit of Section 14 of the Limitation Act to Senior India, given the change in law by the Supreme Court’s ITC Limited judgment.
2. Whether CESTAT was correct in dismissing an appeal as time-barred when the underlying appeal had been filed within the prescribed period.
The Court’s Analysis and Findings
- Application of Section 14 Principles: The Court recognized that while the Limitation Act does not directly apply to customs appeals, the principles underlying Section 14 (exclusion of time spent in bona fide proceedings) do apply. The Court found that Senior India had acted diligently, pursuing remedies as per the law prevailing at the time, and promptly adjusted its approach after the Supreme Court’s decision.
- Exclusion of Time: The period during which Senior India pursued the refund remedy and sought amendment of Bills of Entry was excluded from the limitation calculation. The Court held that, due to the legal transition caused by the ITC Limited judgment, the authorities should have allowed this exclusion.
- Statutory Extension Due to COVID-19: The Court also noted that the period for filing appeals was further extended by government notifications issued during the COVID-19 pandemic, making Senior India’s appeals timely.
- Error in Dismissing Appeals as Time-Barred: In one case, the Court found that the appeal had been filed well within the statutory period, and its dismissal by CESTAT as time-barred was manifestly erroneous.
Outcome and Directions
- The High Court set aside the orders of CESTAT and the Commissioner (Appeals) that had rejected Senior India’s appeals on limitation grounds.
- The appeals were restored for decision on merits, with instructions to the authorities not to revisit the limitation issue.
- The Court directed that the restored appeals be decided within four months, and that refund and amendment applications be processed in accordance with the final outcome.
Implications of the Judgment

This decision is significant for importers and legal practitioners dealing with customs disputes:
1. Clarifies Limitation Law: The judgment affirms that bona fide pursuit of remedies under the law as it stood can justify exclusion of time from limitation, especially when the legal position changes due to a higher court ruling.
2. Ensures Fairness: The Court’s approach prevents penalizing parties for following the law as it existed before a judicial shift.
3. Guidance for Future Cases: The decision provides a roadmap for handling similar disputes where refund claims or appeals are affected by changes in legal interpretation.
Conclusion

The Delhi High Court’s ruling in the Senior India Pvt Ltd case underscores the importance of judicial flexibility and fairness in applying limitation law, especially in the context of evolving legal standards. Importers and legal professionals should take note of this precedent when navigating refund and appeal processes under the Customs Act.

Connected Matter

Delhi HC Affirms Importers’ Right to Refund of Excess Customs Duty Paid Without Assessment Order u/s 27 of Customs Act

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Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

Source: Delhi High Court

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August 14, 2026
CESTAT Bangalore Orders Refund of Customs Duty on Destroyed Imports: Clarifies Duty as Deposit When No Clearance for Home Consumption
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 01.08.2026

CESTAT Bangalore Orders Refund of Customs Duty on Destroyed Imports: Clarifies Duty as Deposit When No Clearance for Home Consumption

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Bangalore recently delivered a significant judgment in favor of Manyata Promoters Private Limited, clarifying the legal position on refund of customs duty paid for goods destroyed due to quarantine violations. This article provides a detailed overview of the case, the legal arguments, and the implications for importers facing similar circumstances.

Background of the Case

Manyata Promoters Private Limited imported “Pillow and Duvet” made from duck feathers from China. Upon arrival, the goods were subjected to scrutiny by Animal Quarantine & Certification Services (AQCS) due to their animal origin. AQCS found the goods non-compliant with quarantine requirements and ordered their destruction or deportation.

The company had already paid customs duty and interest for delayed payment at the time of import. Following AQCS’s directive, Manyata requested the Customs Department to destroy the goods and refund the duty paid. The Adjudication Authority imposed a penalty and fine for the violation but did not demand customs duty, as the goods were never cleared for home consumption.

Legal Arguments and Proceedings

Appellant’s Position
1. Nature of Payment: Manyata argued that the amount paid at import was only a deposit, not a duty, since the goods were never cleared for home consumption under Section 47(1) of the Customs Act, 1962.
2. No Taxable Event: The company emphasized that the taxable event for customs duty—clearance for home consumption—never occurred. Therefore, no duty was legally payable.
3. Refund Eligibility: The refund claim was filed under Section 27, not Section 26A, as the latter applies only when duty has been paid or is payable. Since no duty was assessed or demanded, Section 26A was inapplicable.
4. Remission of Duty: Even under Section 23(1), remission of duty is allowed if goods are destroyed before clearance. Since the goods were destroyed before being cleared, no duty was due.
Revenue’s Position

The Revenue argued that, under Section 26A(1), no refund is eligible where an offence appears to have been committed. The First Appellate Authority accepted this view and denied the refund.

CESTAT’s Analysis and Decision

The Tribunal made several key findings:
1. No Clearance, No Duty: Since no order for clearance for home consumption was passed, the taxable event did not occur. The payment made was a deposit, not a duty.
2. Refund is Justified: The Tribunal held that the department was duty-bound to refund the deposit, as no customs duty was legally leviable.
3. Section 26A Not Applicable: The Tribunal agreed with the appellant that Section 26A did not apply, as there was no importation in the legal sense and no duty was assessed.
4. Remission Under Section 23(1): The Tribunal noted that even if duty had been assessed, remission would be available since the goods were destroyed before clearance.
5. Precedents Cited: The Tribunal relied on Supreme Court and High Court judgments, including Mangalore Refinery and Petrochemicals Ltd. v. CC, Fortis Hospital Ltd. v. CC, and others, to support its reasoning.
Final Order

The CESTAT set aside the impugned order denying the refund and allowed the appeal, directing that the refund be processed in accordance with law.

Implications for Importers

This ruling clarifies that:
- Customs duty is only payable when goods are cleared for home consumption.
- Payments made before such clearance, if goods are destroyed or not cleared, are considered deposits and must be refunded.
- Importers should carefully assess the legal character of payments made during import procedures, especially when goods are not ultimately cleared.
Conclusion

The Manyata Promoters Private Ltd case sets an important precedent for importers dealing with goods destroyed due to regulatory non-compliance. It reinforces the principle that customs duty is linked to the occurrence of a taxable event and provides clarity on refund entitlements in such scenarios.

Connected Matter

Delhi High Court: No Customs Duty Recoverable Without Specific Demand in Show Cause Notice

Source: CESTAT Bangalore

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August 1, 2026
CESTAT Delhi Grants 12% Interest on Delayed Refund of Pre-Deposit
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 28.07.2026

CESTAT Delhi Grants 12% Interest on Delayed Refund of Pre-Deposit

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

A recent decision by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Delhi, has provided significant clarity on the entitlement and rate of interest for delayed refunds of pre-deposit amounts in customs duty cases. The case, involving M/s Savi Vision Pvt Ltd., addresses the long-standing issue of compensation for delayed refunds and sets a precedent for similar disputes.

Case Background
- Appellant: M/s Savi Vision Pvt Ltd., represented by Director Sanjeev Ratra
- Respondent: Commissioner of Customs (Preventive), New Delhi
- Core Issue: The appellant sought interest at 12% per annum on a refund amount, from the date of deposit until disbursement, after a protracted legal process.
Timeline of Events
1. Initial Allegation & Penalty:
  - The appellant was accused of aiding in evasion of Contravening Duty (CVD) by under-declaring the retail selling price at import.
  - A penalty of Rs. 25 lakhs was imposed.
2. Appeals & Pre-Deposit:
  - The appellant challenged the order, making a pre-deposit of Rs. 5 lakhs as directed by the Tribunal and the Delhi High Court.
3. Remand & Reduced Penalty:
  - In 2015, the Tribunal set aside the original order, remanded the case for recomputation, and reduced the penalty to Rs. 50,000.
4. Delayed Compliance:
  - Despite repeated requests from 2015 to 2023, the department delayed compliance with the Tribunal’s order.
5. Refund Application & Interest Dispute:
  - The refund was finally sanctioned in 2024, but interest was granted only at 6% per annum, leading to the present appeal for 12% interest.
Legal Arguments & Tribunal’s Analysis

Appellant’s Stand
- Cited previous Tribunal decisions (notably, Kumavat Contractors vs. Commissioner of CGST & ST, Jaipur I) supporting 12% interest on delayed refunds.
- Argued that the refund was a pre-deposit, not a duty, and thus entitled to higher interest.
Department’s Stand
- Claimed that 6% interest, as per Section 35F of the Central Excise Act, 1944, was appropriate and already granted.
Tribunal’s Findings
- Precedent & Statutory Interpretation:
  - The Tribunal examined Section 35F and 35FF of the Central Excise Act, both pre- and post-amendment, and relevant case law.
  - It noted that for pre-deposits, the law and judicial precedents (including Supreme Court and High Court rulings) support interest at 12% per annum for delayed refunds.
- Key Judicial References:
  - Sandvik Asia Ltd. vs. CIT, Pune: Established the principle of compensation for delayed refunds.
  - Sony Pictures Networks India Pvt. Ltd. and Ghaziabad Ship Breakers Pvt. Ltd.: Affirmed 12% interest on delayed pre-deposit refunds.
  - Commissioner of Customs (Import), Raigad vs. Finacord Chemicals (P) Ltd.: Clarified that unjust enrichment does not apply to pre-deposit refunds.
- Final Decision:
  - The Tribunal modified the impugned order, allowing the appeal and granting interest at 12% per annum from the date of deposit until realization.
Implications of the Ruling
1. For Importers & Assessees:
  - Sets a clear precedent for claiming higher interest (12%) on delayed refunds of pre-deposits in customs and excise matters.
  - Reinforces the principle that government departments must compensate for undue delays in refunding amounts held during litigation.
2. For the Department:
  - Emphasizes the need for timely compliance with appellate orders to avoid additional financial liability.
  - Clarifies that pre-deposit refunds are distinct from duty refunds and not subject to unjust enrichment provisions.
Conclusion

The CESTAT Delhi’s decision in the case of M/s Savi Vision Pvt Ltd. is a significant development in customs jurisprudence. It upholds the rights of assessees to fair compensation for delayed refunds and provides a robust legal basis for future claims involving pre-deposit interest.

This ruling is expected to influence similar cases and encourage prompt action by revenue authorities in processing refunds.

Source: CESTAT Delhi

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July 28, 2026
CESTAT Kolkata Orders 12% Interest to Berger Paints on Customs Refund
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 23.07.2026

CESTAT Kolkata Orders 12% Interest to Berger Paints on Customs Refund

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

A recent order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has set a significant precedent in customs refund jurisprudence. The case involved M/s. Berger Paints India Limited and the Department of Customs, focusing on the rate of interest applicable to refunds of amounts deposited during investigations.

Background of the Case

Berger Paints India Limited imported mixed xylene isomers between 2011 and 2014, classifying them under Customs Tariff Heading 2902.44.00. The goods were warehoused and later cleared for home consumption after duty payment. Subsequently, the Directorate of Revenue Intelligence (DRI) initiated an investigation, contending that the goods should be classified under a different heading (2707), resulting in a duty difference of Rs. 7,44,493. Berger Paints deposited this amount ‘under protest’ in 2014.

In 2017, the adjudicating authority confirmed the demand and appropriated the deposit as duty. Berger Paints appealed to CESTAT, which ruled in their favor in January 2025, setting aside the demand. The Department’s appeal to the Supreme Court was dismissed in September 2025.

The Refund Dispute

Following the Supreme Court’s dismissal, Berger Paints sought a refund of the deposited amount, along with interest at 12% per annum. The authorities refunded the principal with 6% interest, prompting Berger Paints to appeal for the higher rate.

Legal Arguments
- Appellant’s Position: Berger Paints cited several precedents, including the Supreme Court’s decision in ITC Ltd. and the Calcutta High Court’s rulings in Madura Coats Private Limited and Rajendra Kumar Jain, which directed payment of 12% interest on delayed refunds of investigation deposits.
- Department’s Position: The Department argued that 6% interest was appropriate, referencing various High Court decisions and a 2014 government notification fixing the rate at 6% for certain refunds.
Tribunal’s Analysis and Decision

The Tribunal examined the legal landscape and emphasized the binding nature of the jurisdictional High Court’s decisions. It noted:
1. The Calcutta High Court, in Rajendra Kumar Jain (2024), held that in the absence of a statutory provision fixing the interest rate for investigation deposit refunds, 12% interest is payable.
2. The 6% rate notification applies only from its date of effect and does not cover periods prior to its issuance.
3. The Tribunal is bound to follow the jurisdictional High Court’s interpretation when there is a conflict among High Courts.
Accordingly, the Tribunal set aside the order granting only 6% interest and directed that Berger Paints be paid interest at 12% per annum on the refunded amount.

Key Takeaways for Importers and Legal Practitioners
1. Jurisdictional High Court Rulings Prevail: When conflicting High Court decisions exist, the Tribunal must follow the ruling of the High Court with jurisdiction over the case.
2. Interest on Investigation Deposits: In the absence of a statutory provision, higher interest (12%) may be awarded on refunds of amounts deposited during investigations, as per prevailing High Court judgments.
3. Notification Applicability: Government notifications fixing interest rates apply prospectively and do not affect periods before their issuance.
Conclusion

The CESTAT Kolkata’s order in favor of Berger Paints India Limited reinforces the importance of jurisdictional High Court decisions in customs matters and clarifies the applicable interest rate on refunds of investigation deposits. This ruling provides valuable guidance for importers and legal professionals dealing with similar disputes.

Source: CESTAT Kolkata

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July 23, 2026
Gujarat High Court Orders IGST Refund on Unconstitutional Ocean Freight Levy
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 18.07.2026

Gujarat High Court Orders IGST Refund on Unconstitutional Ocean Freight Levy

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Gujarat High Court’s recent judgment in the case of M/s Comsol Energy Private Limited vs. State of Gujarat has significant implications for businesses seeking refunds of Integrated Goods and Services Tax (IGST) paid under the reverse charge mechanism (RCM) on ocean freight. This article provides a detailed overview of the case, the legal principles involved, and the broader impact on taxpayers and tax administration.

Background of the Case

M/s Comsol Energy Private Limited filed a writ petition challenging the rejection of their IGST refund claims. The company had paid IGST on ocean freight under RCM, following government notifications that were later declared unconstitutional by the Gujarat High Court in the landmark Mohit Minerals case. After this decision, Comsol Energy sought a refund of Rs. 93.54 lakhs for IGST paid in February and March 2018.

However, the tax authorities issued deficiency memos, rejecting the refund claims on the grounds that they were not filed within the statutory time limit under Section 54 of the Central Goods and Services Tax (CGST) Act, and that there was no specific category for such refunds.

Key Legal Issues
1. Legislative Competency and Constitutionality
  - The Court reaffirmed its earlier decision that the notifications imposing IGST on ocean freight under RCM lacked legislative competency and were unconstitutional.
  - Article 265 of the Constitution of India mandates that no tax shall be levied or collected except by authority of law. Any tax collected without such authority must be refunded.
2. Applicability of Refund Provisions
  - The authorities argued that Section 54 of the CGST Act, which prescribes a time limit for refund claims, applied to the case.
  - The Court held that since the IGST was collected without authority of law, it did not qualify as a ‘tax’ under the Act. Therefore, Section 54 did not apply.
  - Instead, Section 17 of the Limitation Act, 1963, which deals with relief from the consequences of a mistake, was deemed applicable. This allows a three-year limitation period starting from the date the mistake is discovered.
3. Precedents Cited
  - The judgment referenced several key cases:
    
    State of Madhya Pradesh vs. Bhailal Bhai: Payments made under a mistake of law must be refunded by the government.
    
    Binani Cement Ltd. vs. Union of India: Refunds of duties collected without authority are not bound by special law limitations; the Limitation Act applies.
    
    Joshi Technology International vs. Union of India: Refund claims for amounts paid under mistake of law are outside the purview of the enactment and governed by the Limitation Act.
    
    3E Infotech Ltd. vs. CESTAT: Service tax paid by mistake must be refunded, regardless of statutory time limits.
Court’s Decision and Directions
- The High Court quashed the deficiency memos rejecting the refund claims.
- It directed the tax authorities to process the refund application for Rs. 93.54 lakhs, along with simple interest at 6% per annum.
- The authorities were instructed not to raise technical objections and to complete the process by a specified deadline.
Implications for Taxpayers
1. Refunds for Unconstitutional Levies
  - Taxpayers who have paid taxes under notifications or provisions later declared unconstitutional are entitled to refunds, even if the statutory time limit under the GST Act has expired.
2. Limitation Period
  - The three-year limitation period under the Limitation Act applies, starting from when the taxpayer becomes aware of the mistake.
3. Interest on Refunds
  - Taxpayers are entitled to interest on the refunded amount, reinforcing the principle that the government cannot unjustly retain money collected without authority.
4. No Technical Barriers
  - Tax authorities must process such refund claims without raising technical or procedural objections, ensuring speedy redressal for taxpayers.
Conclusion

This judgment strengthens the rights of taxpayers to claim refunds for taxes paid under unconstitutional provisions. It clarifies that the general law of limitation applies in such cases, and that the government is obligated to return amounts collected without authority, with interest. Businesses affected by similar issues should review their tax payments and consider seeking refunds where appropriate.

Connected Matter

CESTAT Bangalore Allows Refund: Quashing of Unconstitutional Export Duty on SEZ Supplies

Source: Gujarat High Court

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July 18, 2026
CESTAT Bangalore Allows SAD Refunds Despite Absence of Invoice Endorsements
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 27.06.2026

CESTAT Bangalore Allows SAD Refunds Despite Absence of Invoice Endorsements

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

A recent decision by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore, has clarified the eligibility criteria for VAT (Special Additional Duty, or SAD) refund claims on imported goods. The case involved M/s. Vestal Impex, a trader importing PVC profile frames through Cochin Port, and addresses key procedural issues that impact importers across India.

Background of the Case

M/s. Vestal Impex imported PVC profile frames and paid Special Additional Duty (SAD) totaling Rs. 84,106 and Rs. 1,62,141 on two separate occasions in May 2013. The company subsequently filed refund claims for these amounts under Notification No. 102/2007-Cus. dated 14.9.2007.

However, the refund claims were rejected by the lower authorities on two grounds:
1. Lack of Chartered Accountant Certificates: The authorities claimed that the required certificates were not submitted.
2. Missing Endorsements on Sales Invoices: The sales invoices did not contain endorsements indicating that CENVAT credit was not availed on the imported goods sold.
Key Arguments and Evidence
- Appellant’s Position:
  - The advocate for Vestal Impex argued that the issue of endorsements on sales invoices had already been settled in previous tribunal decisions (notably, R.K.G. International Pvt. Ltd. and House Full International Ltd.).
  - Chartered Accountant certificates were, in fact, submitted with the refund claims but were overlooked by the authorities.
  - Endorsements regarding non-availability of CENVAT credit were made on the original invoice copies given to customers, though not on the retained copies.
  - Documentary evidence supporting these claims was provided in the appeal paper-books.
- Revenue’s Position:
  - The Revenue reiterated the findings of the Commissioner (Appeals), maintaining that the absence of endorsements and certificates justified the rejection.
Tribunal’s Findings

The Tribunal examined the evidence and found:
1. Compliance with Requirements: Vestal Impex had submitted the necessary Chartered Accountant certificates and provided sample invoices with the required endorsements.
2. Legal Precedent: It is now settled law that the absence of an endorsement on the sales invoice regarding non-availability of CENVAT credit cannot be used as a ground to deny SAD refunds.
Final Order

The Tribunal set aside the orders of the lower authorities and allowed the appeals, granting Vestal Impex the refund claims with consequential relief.

Implications for Importers

This ruling provides important clarity for importers seeking SAD refunds:
- Endorsement Requirement: The absence of a specific endorsement on all copies of sales invoices does not automatically disqualify a refund claim, provided other evidence is available.
- Documentary Evidence: Importers should ensure that Chartered Accountant certificates and at least one copy of the sales invoice with the required endorsement are submitted with refund claims.
- Legal Certainty: The decision reinforces the principle that procedural lapses, such as missing endorsements on retained invoice copies, should not override substantive compliance and entitlement to refunds.
Conclusion

The CESTAT Bangalore’s decision in favor of Vestal Impex sets a significant precedent for the processing of SAD refund claims. Importers should take note of the clarified requirements and ensure proper documentation to avoid unnecessary rejections of legitimate refund claims.

Connected Matter

CESTAT Chennai Allows SAD Refund: Departmental Lapses and Procedural Compliance Clarified

Source: CESTAT Bangalore

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June 27, 2026