Revenue must refund pre-deposit with 6% annual interest after Tribunal sets aside confiscation order

The Delhi HC ruled in favor of a petitioner seeking refund of pre-deposit with interest after goods were seized under EXIM Policy violations. The Tribunal had set aside the original confiscation order, making the redemption fine and penalty refundable. The HC held that revenue cannot enrich itself at the petitioner's expense and must pay 6% annual interest on the entire deposited amount from deposit date until refund, not just on the pre-deposit portion. The court quashed the Assistant Commissioner's corrigendum and directed refund processing within two weeks.

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Issues Involved:
1. Refund of pre-deposit amount of Rs. 9,30,000/- along with applicable interest.
2. Refund of seized cash amount of Rs. 14,10,990/- along with applicable interest.
3. Quashing of the impugned Corrigendum dated 10.04.2023.
4. Directions to disburse interest amounting to Rs. 7,41,146/- as originally sanctioned.

Summary:

Refund of Pre-Deposit Amount:
The petitioner sought a refund of the pre-deposit amount of Rs. 9,30,000/- along with applicable interest as per CBIC Circular No. 984/08/2014-CX dated 16.09.2014. The Customs Excise & Service Tax Appellate Tribunal (CESTAT) set aside the earlier order and granted consequential benefits, including the refund. The Assistant Commissioner (Refund) initially sanctioned a refund of Rs. 16,71,146/- but later issued a Corrigendum reducing the interest amount, which the petitioner contested.

Refund of Seized Cash:
The petitioner also sought a refund of the seized cash amounting to Rs. 14,10,990/- along with interest. The respondent argued that the seized cash was never deposited with the Government Exchequer and was thus not in the nature of duty, making it ineligible for interest under Sections 27-A and 129-EE of the Customs Act.

Quashing of Corrigendum:
The petitioner challenged the Corrigendum dated 10.04.2023, which reduced the interest amount on the pre-deposit. The court found that the petitioner was not entitled to interest on the entire amount of Rs. 9,30,000/- under Section 129-EE or the CBIC Circular but was entitled to interest on the amount deposited for filing the appeal.

Directions for Interest Disbursement:
The court quashed the impugned Corrigendum and directed the respondent to refund Rs. 9,30,000/- along with interest at the rate of 6% per annum from the date of deposit till the date of refund. The court emphasized that the Revenue could not enrich itself at the petitioner's expense and cited the Supreme Court's decision in Tata Chemicals Limited, which held that interest follows as a matter of course when money is retained without right.

Conclusion:
The court ordered the respondent to process the refund within two weeks and disposed of the petition along with the pending application.

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