M/s Sai Vision Pvt Ltd v. Commissioner of Customs (preventive)

GST update /2026-27/0016

GST UPDATE
Appeal No.: Customs Appeal No. 51596 of 2025
Authority: CESTAT (New Delhi)- PRINCIPAL BENCH
Case Title: M/s Sai Vision Pvt Ltd. v. Commissioner of Customs (Preventive)
Outcome: Appeal was dismissed and decision of Appellate Authority was
upheld
Judgement Date: 29.01.2026

BRIEF FACTS OF THE CASE:
Revenue Department got an intelligence about the M/s Sai Vision Pvt Ltd (hereinafter referred to as appellant) that the goods were imported by wilfully mis-declaring the Maximum Retail price (M.R.P.) with an intent to evade and short paid Custom Duty. Based on the investigation, a show cause notice (SCN) followed by the Order in Original was issued by the department which purported to pay the short paid customs duty. Aggrieved thereby, the appellant preferred an appeal before CESTAT and, pursuant to directions of the Delhi High Court, deposited an amount of Rs. 35 lakhs, resulting in total deposits of Rs. 41,93,820/- during the period from 06.04.2005 to 20.09.2010. Thereafter, CESTAT vide Final Order dated 07.08.2015 set aside the adjudication order and remanded the matter for recomputation of demand in respect of goods sold to NCCF/Kendriya Bhandar. Even after several follow-up emails/ requests, revenue department did not comply with the directions of the remand order for 8 years long. Aggrieved appellant approached Tribunal in terms of Rule 41 of CESTAT Procedure Rules, 1982 for issuing directions to the department seeking compliance of the tribunals final order dated 07.08.2015. Subsequently, an order dated 27.06.2023 was passed by the Tribunal which provided directions for recomputation. Pursuant to this order, a refund application dated 29.08.2023 was filed by the Appellant claiming refund of Rs. 30,73,862/- after appropriating the duty and penalty. Consequently, refund was sanctioned by the adjudicating authority. However, the sanctioned refund order did not include interest provision. Therefore, aggrieved the appellant preferred appeal before the Commissioner (Appeals) which allowed interest from the date of deposit till the date of refund, but restricting the same to 6% per annum, against which the appellant preferred the present appeal before the Tribunal seeking enhancement of the rate of interest to 12% per annum.
QUESTION BEFORE HON’BLE TRIBUNAL:
• Whether the refund under Section 11B of Central Excise Act to be paid along with interest at higher rate of 12% from the date of deposit till the date of disbursal of the same?
BRIEF ARGUMENTS BY APPELLANT:
Appellant submitted following contentions: -
• Interest to be awarded at higher rate of 12% by placing reliance on various judicial pronouncements:
Appellant prayed for granting interest @ 12% by placing reliance on various judgements in the case of:
? Bird Audio Electronics Vs. Commissioner of CGST, Final Order No. 50172/2022 dated 28.02.2022 in Appeal No. E/51056/2021.
? Parle Agro Pvt Ltd. vs. Commissioner of CGST, Noida reported as 2022 (380) ELT 2019 (Tri.-All.)
? M/s. Design Dialogues India Pvt. Ltd., Final Order No. 51514/2022 dated 03.06.2022 in Appeal No. E/50773/2022.
The appellant contended that these decisions supported grant of higher interest at 12% per annum. Therefore, the impugned order should be modified accordingly.
BRIEF ARGUMENTS BY REVENUE DEPARTMENT:
Revenue Department contended that:
• Appellate authority was diligent and considered all the provisions:
Revenue department contended that Commissioner (Appeals) has always been diligent while considering all the legal provisions to sanction the refund of the amount deposited by the appellant along with the interest.
• Refund is regulated by Section 11B of Central Excise Act:
Department submitted that interest rate of 6% has been specifically provided by the Notification No. 70/2014 – Cus. dated 12.08.2014. Further, it was contended that even though an amount is a pre-deposit still it has to be established as to whether it was deposited towards the duty/tax or it was paid towards other payments. Section 11B of Central Excise Act will be considered for payment of interest.

FINDINGS & JUDGEMENT:
Following are the findings of the Tribunal in the instant case:
• Commissioner(Appeals) has rightly awarded the interest as per the provisions in regulation at the instant time:
In this regard, the Tribunal noted that Notification No. 67/2003-CE and Notification No. 70/2014 prescribed the statutory rate of interest payable on delayed refunds. Though the statute contemplated a range between 5% to 30%, the notified rate applicable in the present case was specifically fixed at 6% per annum. Consequently, the Tribunal held that the Commissioner (Appeals) rightly restricted the interest to the statutory rate of 6%.

• Interest to be awarded as per the notification issued under Section 11BB:
It was observed that the instant case is not res integra and is squarely covered by the decision in the case of Devendra Udyog Vs. Commissioner of CGST, Jodhpur reported as 2020 (372) ELT 385 (Tri.Del), unless it has been observed that if the deposit is towards Central Excise Duty then as far as the payment of interest is concerned, the provisions of Sec. 11-BB of the Central Excise will be solely applicable. Notifications were issued under Sec.11BB and therefore interest to be paid based on the rate specified in the notification.

• Tribunal Bound by Statutory Framework
A significant observation made by the Tribunal was that CESTAT, being a creature of statute, does not possess inherent equitable powers to grant relief contrary to statutory provisions. Although the appellant highlighted the inordinate delay of nearly eight years on the part of the department in implementing the remand order, the Tribunal held that such delay could not justify grant of interest beyond the rate specifically prescribed under the statutory notifications.

• Instant case does not fall under the judicial pronoucements relied upon by the Appellant:

The tribunal held that Judgements in the case of Bird Audio Electronics (supra) can not be relied because in that case even refund claim was rejected and also Parle Agro Pvt Ltd. (supra) as in the said case the Notification of 2014 was not brought to the notice of the court. Therefore, the judgements cannot be relied as the instant case circumstances are different and therefore cannot be squarely covered.

Thus, it was held that the appeal by the appellant stands set aside.

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