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2019 (10) TMI 700 - HC - CustomsInterest on delayed refund - scope of 'duty' and 'deposit' - refund was rejected on the reason that no appeal was filed against the assessment order - whether the amount collected from the petitioner is a “duty” or “deposit”? - HELD THAT:- No doubt, both 'duty' and 'deposit' are in the hands of the Revenue. At the same time, it is to be noted that right to credit or forfeit such deposit would arise only after determination of the liability to pay the 'duty'. On the other hand, the right over the duty so paid is instant on the revenue and not a postponed entitlement - Therefore, an amount so determined as 'duty' by processing the Bill of Entry and collected by the Revenue can never be termed as a “deposit”, even assuming that such collection, later, is found to be either unlawful or excessive - the claim of the Revenue that the amount collected was only a “deposit” and not “duty”, is factually incorrect and thus liable to be rejected. Whether the petitioner is entitled for interest on the amount refunded? - HELD THAT:- Liability to refund begins when it actually due and not when it is actually determined. At this juncture, it is worth to note that while adjudicating the duty liability, the Adjudicating Authority also imposes interest and penalty on such duty liability. It is not that duty alone is collected from the importer from the date of adjudication and on the other hand, such liability to pay duty is fastened on such importer from the date when it becomes due. Therefore, the Revenue collects the interest on such belated payment of duty and also penalty for not paying the same at the appropriate time. The same analogy is to be applied in the case of refund as well, while considering the payment of interest. Section 27A of the Customs Act was carefully coined for payment of such interest from the expiry of three months of the date of the application and not from the date of the order. The order of the respondent, impugned in this writ petition, cannot be sustained - Petition allowed - the respondent is directed to pay interest with permissible percentage under law, from the date of expiry of three months from the date of receipt of the refund application dated 20.09.2012.
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