Provisional customs assessment delay can trigger refund with statutory interest when finalisation is unjustifiably withheld.

Provisional customs assessments kept pending for an unduly long period, despite submission of required documents and repeated requests for finalisation, could not justify continued withholding of the importer's refund. The Board's circular required provisional assessment and investigation to be completed within four months of receipt of the reply, and a departmental communication recorded that the cess and additional duty issue on imported coal had already been settled, requiring finalisation accordingly. On that basis, the Department's contention that no time limit applied was rejected, and the importer was held entitled to refund of the deposit with statutory interest for delayed payment.

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Issues: Whether the petitioner was entitled to refund of the amount deposited at the time of provisional assessment, along with interest, in view of the inordinate delay in finalisation of the bills of entry and the settled position on leviability of cess/additional duty on imported coal.

Analysis: The assessments had remained provisional for an unduly long period despite the petitioner having furnished the required documents and sought finalisation repeatedly. The Board's circular required provisional assessment and investigation to be completed within four months from receipt of reply, failing which the extra duty deposit was to be discontinued and responsibility for delay would attach to the assessing officer. The subsequent departmental communication also recorded that the issue of leviability of cess/additional duty on imported coal had already been settled and that provisional assessments relating to such imports were to be finalised accordingly. In these circumstances, the Department's plea that there was no time limit for finalisation was rejected, and the continued withholding of refund was found unjustified.

Conclusion: The petitioner was held entitled to refund of the amount deposited, together with interest from the relevant dates under Section 27A of the Customs Act, 1962.

Final Conclusion: The writ petition succeeded, and the respondents were directed to make payment of the refund with statutory interest within the time fixed by the Court.

Ratio Decidendi: Where provisional customs assessments and related refund claims are kept pending without justification despite completion of the necessary reply and the issue having been settled, the importer becomes entitled to refund with statutory interest for delayed payment.

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