Interest on delayed refund of pre-deposit runs from three months after the refund application until actual payment.

Interest is payable on delayed refund of a pre-deposit because mere return of the deposited amount does not compensate the applicant for the delay. The Tribunal applied the settled position that such refunds attract interest and aligned the period and rate with Section 27A of the Customs Act, 1962. Interest was directed to run from the expiry of three months after the refund application until the date of actual payment, in favour of the applicant.

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Issues: Whether interest is payable on delayed refund of the pre-deposit amount, and if so, the applicable period and rate of interest.

Analysis: The Tribunal held that the refund of the pre-deposit could not be treated as a mere return of deposited money without compensating the applicant for delay. Reliance was placed on the settled position that refund of pre-deposit carries interest, and the period and rate of interest were aligned with the principles contained in Section 27A of the Customs Act, 1962. The interest was directed to run from the date of expiry of three months after the refund application until the date of actual payment.

Conclusion: Interest is payable on the delayed refund of the pre-deposit, at the rate prescribed under Section 27A of the Customs Act, 1962, for the specified period, in favour of the applicant.

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