Supreme Court Issues Notice On Vedanta's Appeal Against Denial Of Interest On Delayed Export Duty Refund

The Supreme Court of India on Monday issued notice in a civil appeal filed by Vedanta Limited challenging a judgment of the Calcutta High Court, which denied interest on a delayed refund of export duty, holding that statutory interest under the Customs Act becomes payable only after a valid refund application is filed.

A Bench of Justices Manoj Misra and Manmohan condoned the delay. It directed issuance of notice, returnable in six weeks. The order records: “Delay condoned. Issue notice, returnable in six weeks.”

Vedanta has challenged the Calcutta High Court's judgment dated September 10, 2025. The judgment was passed in an appeal filed by the Customs Department against an order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

The tribunal had directed payment of interest at 12 percent per annum on the refund of excess export duty paid by the company on iron ore exports.

The High Court set aside the Tribunal's order. It held that refunds and interest under the Customs Act are governed by Sections 27 and 27A. It held that filing of a statutory refund application is mandatory.

The High Court held that interest becomes payable only if the refund is not made within three months from the date of receipt of the refund application.

The Court noted that Vedanta filed its refund application on August 5, 2022. The refund was sanctioned on September 5, 2023. It was released on September 6, 2023.

The Court held that the refund was granted within the statutory timeframe. It held that no delay in attracting interest was established.

The High Court rejected the Tribunal's direction to grant interest from January 2011. It held that the refund amount “got crystallized for the first time only after the Order-in-Original dated 05.09.2023.” It held that the award of interest from 11.01.2011 is not sustainable.

The court rejected Vedanta's contention that the excess duty paid was a “deposit.” It held that the export duty was paid voluntarily on the basis of self-assessment.

The court held that it was “too late in the day” for the assessee to contend that the assessment was provisional.

For Petitioner: Advocate-on-Record Rajat Mittal, Sudipta Bhattacharjee, Onkar Sharma, Arjyadeep Roy, Priyanshu, Subham Kumar, Akriti Anand, Bharat Raichandani, Anishka Gupta, Krati Agarwal