UNION OF INDIA AND ORS. versus M/S. B.T. PATIL AND SONS BELGAUM (CONSTRUCTION) PVT. LTD

Citation: [2024] 2 S.C.R. 91 · Decided: 05-02-2024 · Supreme Court of India · Bench: ABHAY S. OKA · Disposal: Dismissed

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Judgment (excerpt)

* Author
[2024] 2 S.C.R. 91 : 2024 INSC 83
Union of India and Ors. 
v. 
M/S. B.T. Patil and Sons Belgaum (Construction) Pvt. Ltd.
(Civil Appeal Nos. 7238 of 2009)
05 February 2024
[Abhay S. Oka and Ujjal Bhuyan,* JJ.]
Issue for Consideration
Entitlement of the respondent to refund of duty drawback and 
interest for delayed payment thereof.
Headnotes
Customs Act, 1962 – ss.75A, 27A – Central Excise Act, 1944 
– Foreign Trade (Development and Regulation) Act, 1992 – 
Foreign Trade (Regulation) Rules, 1993 – Customs, Central 
Excise Duties and Service Tax Drawback Rules, 1995 – Exim 
Policy of 1992-1997 – Duty Exemption Scheme – Duty Drawback 
Scheme – Supplies in civil construction work, eligibility for 
‘deemed export’ benefit under the Exim Policy – Respondent, 
a class-I contractor specializing in the field of civil contract 
works especially funneling and hydro-electric power projects 
had completed the work awarded to it in 1996 in a project called 
Koyna Hydro Electric Power Project, Maharashtra funded by 
the International Bank for Reconstruction and Development, an 
arm of the World Bank – Respondent claimed duty drawback 
and interest for the delayed refund thereof – Entitlement:
Held: On a conjoint reading of the relevant provisions of the Exim 
Policy, 1992-1997 in conjunction with the Central Excise Act and 
the Customs Act, it is evident that supply of goods to the project 
in question by the respondent was a case of ‘deemed export’ and 
thus entitled to the benefit under the Duty Drawback Scheme – The 
language employed in the policy made this very clear and there 
was no ambiguity in respect of such entitlement – Even if there 
was any doubt, the same was fully explained by the 1995 Rules – 
It is not correct on the part of the appellants to contend that there 
was no provision for payment of interest on delayed refund of 
duty drawback – It is also untenable for the appellants to contend 
that refund of duty drawback was granted to the respondent as a 
concession, not to be treated as a precedent – Respondent entitled 
92
[2024] 2 S.C.R.
Digital Supreme Court Reports
to refund of duty drawback as a deemed export under the Duty 
Drawback Scheme – Applications for refund were made in 1996 
– Decision to grant refund of duty drawback was taken belatedly 
on 07.10.2002 whereafter the payments were made by way of 
cheques on 31.03.2003 and 20.05.2003 – Admittedly, there was 
considerable delay in refund of duty drawback – Under s.75A(1) 
of the Customs Act, where duty drawback is not paid within three 
months from the date of filing of claim, the claimant would be entitled 
to interest in addition to the amount of drawback – It provides that 
the interest would be at the rate fixed u/s.27A from the date after 
expiry of the said period of three months till the payment of such 
drawback – The interest rate prescribed u/s.27A at the relevant 
point of time was not below ten percent and not exceeding thirty 
percent per annum – The Central Board of Excise and Customs vide 
its notification bearing No.32/1995 (NT)- Customs dtd. 26.5.1995 
had fixed the rate of interest at fifteen percent for the purpose of 
s.27A – Since there was belated refund of the duty drawback to 
the respondent, it was entitled to interest at the rate which was 
fixed by the Central Government at the relevant point of time being 
fifteen percent – Order of the Division Bench of the High Court 
not interfered with. [Paras 33-39]
Case Law Cited
S. S. Grewal v. State of Punjab [1993] 3 SCR 593 : 1993 
Suppl. 3 SCC 234; Rajagopal Reddy (dead) by Lrs. v. 
Padmini Chandrasekharan (dead) by Lrs. [1995] 1 SCR 
715 : (1995) 2 SCC 630; Zile Singh v. State of Haryana 
[2004] 5 Suppl. SCR 272 : (2004) 8 SCC 1 – referred to.
List of Acts
Central Excise Act, 1944; Customs Act, 1962; Finance Act, 
1994, Imports and Exports (Control) Act, 1947; Foreign Trade 
(Development and Regulation) Act, 1992; Foreign Trade 
(Regulation) Rules, 1993; Customs, Central Excise Duties and 
Service Tax Drawback Rules, 1995.
List of Keywords
Drawback; Duty drawback; Duty Drawback Scheme; Exim Policy 
of 1992-1997; Duty Exemption Scheme; Deemed export; Delayed 
refund of duty drawback; Interest; Multilateral or bilateral agencies; 
International Bank for Reconstruction and Development; World Bank; 
Central Board of Excise and Customs; Imports of duty free material; 
Notification declaratory/clarificatory; Retrospective operation.
[2024] 2 S.C.R. 
93
Union of India and Or

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