Delayed Duty Drawback Entitles Claimants To Interest: SC

New Delhi, Feb 6 (KNN) The Supreme Court has ruled that under Section 75A of the Customs Act, 1962, if duty drawback remains unpaid for three months after filing a claim, claimants are entitled to interest in addition to the drawback amount.

In a case where the Union appealed against a Division Bench's decision affirming a Single Judge's order granting interest to the claimant at 15 per cent for the delay, the Court dismissed the appeal.

The case stemmed from a subcontractor's claim for duty drawback under the Exim Policy, 1992-1997, for supplies in civil construction work for the Koyna Hydro Electric Power Project.

Despite initial rejections, the respondent sought duty drawback, which the Single Judge ruled in favour of, awarding interest at 15 per cent for the delay.

This decision was upheld by the Division Bench, which emphasised the entitlement of civil construction works to deemed export benefits.

The Court noted that subsequent notifications in 1998 and 2000 clarified the eligibility criteria, having a retrospective effect.

Therefore, the Division Bench ruled that the claimant was entitled to interest from three months after the 1996 refund application until payment at a rate of 15 per cent.

(KNN Bureau)