Geetanzali Overseas Pvt. Ltd. was erroneously refunded on 16.06.2019 a sum of ₹ 30,000 in excess of the actual due amount of the duty drawback. A demand notice for recovery of the excess amount so paid was issued by the

According to section 75A(2) of the Customs Act, 1962, where any drawback has been paid to the claimant erroneously or it becomes otherwise recoverable under the Customs Act, 1962 or the rules made there under, the claimant shall, within a period of two months from the date of demand pay in addition to the said amount of drawback, interest at the rate fixed under Section 28AA of the Customs Act, 1962 i.e. @ 15% p.a. The amount of interest shall be calculated for the period beginning from the date of payment of such drawback to the claimant till the date of recovery of such drawback from the claimant. Geetanzali Overseas Pvt. Ltd. had though refunded the amount on 16.10.2019, after issuance of demand notice to refund such excess amount on 24.08.2019 but the interest shall be charged from the date of payment being 16.06.2019 to the actual date of refund being 16.10.2019 and not from the date of issuance of demand notice on 24.08.2019. Computation of interest chargeable on amount of ₹ 30,000 Particulars Amount (₹) Duty drawback erroneously refunded 30,000 Due date of payment of erroneous drawback 16.06.2019 Date of issuance of demand notice 24.08.2019 Date of repayment by the assessee 16.10.2019 No. of days of delay between 16.06.2019 to 16.10.2019 being (14 + 31 + 31 + 30 + 16 = 122) 122 days Rate of interest 15% Quantum of Interest (30,000 × 122 / 365 × 15%) 1504