Refund interest protection: sanctioned interest under an operative order cannot be withheld or recovered without a stay.

Interest on a refunded anti-dumping duty, once quantified and sanctioned in compliance with an operative court direction, could not be withheld by the revenue in the absence of any stay. The customs authority had granted refund with interest pursuant to the Division Bench's order, and the revenue's appeal and revision against the interest order had failed. On those facts, a notice seeking recovery of alleged excess interest was inconsistent with the refund order and could not be sustained merely because further proceedings were said to be pending. The interest was therefore to be released, and the recovery notice was quashed.

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Issues: Whether the petitioner was entitled to release of interest on the refunded anti-dumping duty and whether the notice demanding return of alleged excess interest could be sustained.

Analysis: The petitioner had deposited anti-dumping duty under protest and the Division Bench had directed refund of the duty with interest at the prevailing bank rate in the event of success. The refund was later allowed, and interest was also quantified and sanctioned by the customs authority in compliance with the court's directions. The revenue's appeal and revision against the interest order had failed, and no stay operated against the order granting interest. In these circumstances, the revenue could not continue to withhold the amount merely because further proceedings were said to be pending. The impugned notice demanding refund of the so-called excess interest was therefore inconsistent with the operative refund order.

Conclusion: The petitioner was entitled to release of the interest, and the notice seeking recovery of excess interest was unsustainable and liable to be quashed.

Ratio Decidendi: Where interest on refund has been granted pursuant to an operative judicial or quasi-judicial order and no stay is in force, the revenue cannot withhold or recover the amount merely on the basis of pending further challenge.

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