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of <h1>Petitioner entitled to interest on delayed refund of bank guarantee amount. 9% interest rate.</h1> <h3>AREVA T&D India Limited Versus Commissioner of Customs Chennai Airport and Air Cargo Complex/Assistant Commissioner of Customs (Refunds -Air)</h3> AREVA T&D India Limited Versus Commissioner of Customs Chennai Airport and Air Cargo Complex/Assistant Commissioner of Customs (Refunds -Air) - 2013 (290) ... Issues:Claim for refund of encashed bank guarantees and entitlement to interest on delayed refund.Analysis:Claim for Refund of Encashed Bank Guarantees:The petitioner imported goods under EPCG licenses with export obligations. Failure to submit Export Obligation Discharge Certificate led to enforcement of bank guarantees totaling Rs.9,60,000 by the Joint Director General of Foreign Trade. Subsequently, upon fulfilling export obligations, the petitioner sought a refund of the encashed amount. The refund claim was initially rejected by the Customs Department, citing delay in filing and breach of trust. However, the Commissioner of Customs (Appeals) overturned this decision, stating that the time limit of six months does not apply to bank guarantee encashment refunds. The Customs, Excise and Service Tax Appellate Tribunal upheld this decision, leading to the refund of Rs.9,60,000 to the petitioner.Entitlement to Interest on Delayed Refund:Following delays in refunding Rs.6,60,000, the petitioner requested interest from December 2004 to August 2008. The second respondent rejected this claim, arguing that interest under Section 27A of the Customs Act applies only to customs duty refunds, not bank guarantee encashments. The respondent contended that the bank guarantee refund does not fall under the purview of Section 27 of the Customs Act and, therefore, does not attract interest. However, the court held that the petitioner is entitled to interest at 9% per annum for the delayed refund amount, based on the decision in Sandvik Asia Ltd. vs. Commissioner of Income Tax and others. The respondents were directed to pay the interest within eight weeks from the date of the court order.In conclusion, the court ruled in favor of the petitioner, allowing the claim for interest on the delayed refund of the encashed bank guarantee amount. The judgment highlighted the distinction between customs duty refunds and bank guarantee encashments, affirming the petitioner's entitlement to interest as per legal precedent.
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