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of <h1>Commissioner rejects appeal on DEPB scheme refund; highlights importance of customs law compliance</h1> <h3>CONCEPT PHARMA LIMITED Versus COMMISSIONER OF CUSTOMS, MUMBAI</h3> CONCEPT PHARMA LIMITED Versus COMMISSIONER OF CUSTOMS, MUMBAI - 2004 (166) E.L.T. 187 (Tri. - Mumbai) Issues:1. Refund claim for DEPB amount and additional duty.2. Re-export of defective goods under DEPB scheme.3. Admissibility of refund for additional duty paid twice on the same goods.Issue 1: Refund claim for DEPB amount and additional duty:The appellants imported goods and paid customs duty through DEPB credit and additional customs duty by cash. The goods were found sub-standard during a chemical test and were re-exported to the supplier. A free replacement was received, and duty was paid again for clearance. The refund claim for DEPB amount and additional duty was rejected by the Deputy Commissioner, stating no provision for refund under DEPB scheme and that importations were independent. On appeal, the Commissioner (Appeals) upheld the rejection, stating Section 27 of the Customs Act was not applicable, and Section 74 should be used for such situations. The appeal was rejected based on these grounds.Issue 2: Re-export of defective goods under DEPB scheme:The consultant for the appellants argued that re-export of defective goods under DEPB scheme is permissible, and 98% credit amount debited against DEPB should be generated for a fresh DEPB. However, the relevant Handbook of Procedures allows re-export of defective goods but does not envisage refund of customs duty against DEPB credit utilized at the time of import. The Para 7.50A required timely action for obtaining a fresh DEPB, which was not done in this case as two DEPBs had expired by the time of replacement consignment importation.Issue 3: Admissibility of refund for additional duty paid twice on the same goods:The lower authorities rightly concluded that no refund of duty is allowed under Section 27 of the Customs Act for separate importations, even if a free replacement was received. The Commissioner (Appeals) noted that a drawback claim could have been filed after re-exporting the defective consignments for the additional duty paid in cash. The absence of any duty exemption notification for replacement consignments further supported the rejection of the refund claim. Ultimately, the appeal was rejected as there was no legal ground to interfere with the lower authorities' decision.This judgment emphasizes the strict interpretation of customs laws and procedures regarding refund claims, re-export of defective goods under the DEPB scheme, and the admissibility of refunds for duty paid twice on the same goods. The decision highlights the importance of timely compliance with relevant regulations and the necessity of following specific provisions for refund claims and re-exports to avoid legal disputes and ensure adherence to customs laws.
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