Retrospective application of customs interest rates rejected; refund interest must be computed period-wise under the notifications then in force.

The revised interest rate notified under Notification No. 75/2003-Cus. did not apply retrospectively to a refund claim for an earlier period. Interest on the sanctioned refund had to be computed period-wise according to the notifications in force during each relevant span. The assessee was entitled to 15% per annum from 1.5.2001 to 10.5.2001, 9% per annum from 11.5.2001 to 11.9.2003, and thereafter at the rate prescribed under Notification No. 75/2003-Cus.

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Issues: Whether the revised rate of interest notified under Notification No. 75/2003-Cus. could be applied retrospectively to the assessee's refund claim for the earlier period, and what rate of interest applied for the different periods covered by the claim.

Analysis: The refund had already been sanctioned and interest was payable for the period from 1.5.2001 to 26.7.2006. The lower rate introduced by the later notification could not be applied to periods prior to its operation. The applicable rates therefore had to be determined period-wise in accordance with the notifications then in force.

Conclusion: The revised rate under Notification No. 75/2003-Cus. was held not to operate retrospectively. The assessee was entitled to interest at 15% per annum from 1.5.2001 to 10.5.2001, at 9% per annum from 11.5.2001 to 11.9.2003, and thereafter at the rate applicable under Notification No. 75/2003-Cus.

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