In a resounding victory for claimants seeking justice under the Customs Act, the Supreme Court has issued a landmark ruling on the entitlement to interest for delayed returns of duty drawback. The verdict, delivered on February 5, establishes a pivotal precedent in favor of claimants awaiting refunds.
The legal saga unfolded as the Directorate General of Foreign Trade (DGFT) contested the provision of interest on delayed refunds of duty drawback. However, the Bench of Justices Abhay S. Oka and Ujjal Bhuyan emphatically rejected this contention, affirming the claimant’s entitlement to interest as stipulated by Section 75A (1) of the Customs Act.
At the heart of the dispute lay the case of a class-I contractor, specializing in civil contract works, who had diligently completed a project in 1996. Despite timely application for refund of duty drawback, the decision to return the funds was inexplicably delayed until 2002.
The High Court, recognizing the injustice of the delay, ruled in favor of the claimant, prompting an appeal from the DGFT to the Supreme Court. However, the apex court dismissed the appeal, upholding the principle that claimants are entitled to interest on delayed refunds under the Duty Drawback Scheme.
Crucially, the court underscored that the entitlement to duty drawback was not a mere concession but a statutory right, firmly rooted in the Customs Act and supported by the Exim Policy. Citing meticulous examination of relevant provisions, the court reaffirmed the claimant’s right to interest at a rate fixed by the Central Government.
In a clear and decisive judgment, the Supreme Court affirmed the claimant’s entitlement to interest from the date of expiry of the three-month period following the refund application. The ruling, echoing the spirit of justice, marks a significant triumph for claimants seeking recourse under the Customs Act.
With this precedent firmly established, the legal landscape for duty drawback claimants stands fortified, ensuring that delays in refunds do not go unrecompensed. The verdict serves as a beacon of hope for claimants navigating the complexities of customs regulations, underscoring the judiciary’s unwavering commitment to upholding fairness and equity in matters of commerce and trade.
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