Pending customs refund claims attract interest under section 27A even if filed before the Finance Bill, 1995 assent.

Interest under section 27A of the Customs Act was treated as payable on refund claims pending with the department when the Finance Bill, 1995 received assent, even if the applications had been filed earlier. The proviso was read as applying to pending matters, not only to refund claims arising after commencement, and interest was held payable where the refund was not made within three months from the relevant date. The department's appeal failed, and the interest liability from after three months from 1-4-1995 was upheld.

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Issues: Whether interest under section 27A of the Customs Act was payable on a refund claim pending on the date of assent of the Finance Bill, 1995, notwithstanding that the claim had been filed earlier, and whether the provision applied to such pending refunds.

Analysis: The proviso to section 27A was read as covering refund claims pending with the department, even where the applications had been filed before the Finance Bill, 1995 received assent. The language of the provision was treated as indicating that interest became payable on refunds not made within three months from the relevant date, and the section was held to apply to pending matters rather than being confined only to claims arising after its commencement.

Conclusion: The interest liability from after three months from 1-4-1995 was upheld, and the department's appeal failed.

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