Interest on delayed customs refund was upheld where no interim stay protected the department's appeal.

Interest on delayed refund of customs duty was governed by departmental circulars requiring refund or rebate pursuant to an appellate order unless a stay had been obtained. As no interim stay was secured in the department's pending appeal, withholding interest was inconsistent with the governing instructions and the earlier writ direction for refund with applicable interest. The claim for interest was therefore maintainable and was decided in favour of the assessee.

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Issues: Whether interest was payable on the delayed refund of customs duty in the absence of any interim stay order in the department's appeal.

Analysis: The entitlement to interest was governed by the departmental circulars, which required refund or rebate arising from an appellate order to be released unless a stay order had been obtained. The earlier writ order had already directed refund with applicable interest, and no interim order had been secured by the department in the pending appeal. In these circumstances, withholding interest was inconsistent with the governing instructions and the earlier direction of the Court.

Conclusion: The claim for interest was held to be maintainable and was decided in favour of the assessee.

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