Interest on Export Iron Ore Fines Duty Refund: CESTAT Directs 6% Annual Interest u/s 129 E of Customs Act\r\n\r\n

The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that Bagadiya Brothers Pvt Ltd, an exporter of iron ore fines, is entitled to a 6% annual interest on the refund of duty under Section 129E of the Customs Act. The case revolved around the export duty on iron ore fines, which is Rs.300 per MT if the Fe content is above 62% but only Rs.50 per MT if it's below, as per Notification No. 62/2007-Cus. \r

The exporter claimed the Fe content was below 62%, supported by a private lab report, and the Central Revenue Control Laboratories later confirmed this. Despite this, there was a dispute over the payment of differential export duty. Representing the assessee, Mr. Hari Radha Krishna argued that a previous High Court ruling cited by the Commissioner (Appeals) did not apply because it concerned a deposit made before a statutory provision for interest on refunds was introduced in 2008. \r

The Tribunal agreed, citing its own precedent in the case of Parle Agro Ltd, which held that amounts paid during an investigation and later found to be refundable should earn interest. The bench, consisting of Anil Coudhary and A.K Jyotishi, allowed the assessee's appeal, ordering a 6% annual interest on the refund from the deposit date until the refund date. The Revenue's appeal was dismissed for lack of merit.