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CA Final · Indirect Tax Laws · Refund

Gupta Metals deposited a pre-deposit with the department under section 129E to file an appeal. The appellate authority allowed the appeal and ordered refund of the deposit. The department delayed the refund. Under section 129EE of the Customs Act, 1962, how is interest payable?

Interest is payable at the rate notified by the Central Government, between 5 and 36 percent per annum, on the amount deposited under section 129E, running from the date of payment of the deposit until the date of refund.

  1. AInterest is payable only from the date of the appellate order, at a fixed 6 percent
  2. BNo interest is payable because deposits are not duty
  3. CInterest is payable at a rate fixed by the Central Government, not below 5 percent and not above 36 percent per annum, from the date of payment of the deposit to the date of refundCorrect
  4. DInterest is payable at 12 percent from three months after the appellate order

Explanation

Section 129EE provides interest at a rate notified by the Central Government, between 5 and 36 percent per annum, on the deposited amount from the date of payment until the date of refund. It does not start from the appellate order date and is not a fixed rate in the statute.

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