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The apex court in this case having appeal no. C.A 7238 of 2009, has observed and laid down that if there is a delay in refund on the ‘duty drawback’ to the claimant under the Customs Act then the claimant would be entitled to interest along with the amount of drawback @ interest which fixed by the Central Government and on the behalf of the CG the DGFT that there was no provision for payment of interest on delayed refund of duty drawback.

The brief facts pertaining to this case is:

• The assessee is a class-I contractor, specializing in the field of civil contract works wherein the contractor completed the contractual work allotted by the Central Government in March 1996 which was funded by the IBRD.
• The assessee made an application for the refund of the claim of the duty drawback from the DGFT in 1996 on the basis of the work. The decision to return the duty-drawback was taken after a huge delay which is against the delay in the return of the duty drawback where the application of which was rejected by the DGFT.
• High Court: Objecting to the application of claiming interest, the contractor preferred a Writ Petition before the High Court which was subsequently allowed by the High Court.
• Supreme Court: The Supreme Court at the outset referred to various provisions of the Customs Act referring to the impugned Judgment of the High Court where the court rejected the contention made by the DGFT that the contractor wouldn’t be entitled to the benefits of the Duty drawback scheme.
• Subsequently, the court rejected the submission of the DGFT that the return of duty drawback provided as a matter of concession and not be treated as a precedent further the court observed that the contractor would be entitled to get interest @15% from the date of expiry of 3 months after submission of applications till the time the payment was made.
• Decision: The court dismissed the appeal preferred by the DGFT by citing that there being no merit in the appeal. (In the favour of the assessee).