Refund by re-credit under exemption notification cannot be curtailed by circulars when procedural timelines are met.

Refund of Special Additional Duty by re-credit in licences or scrips was held admissible where the re-credit and utilisation were completed within the extended time permitted by departmental circulars, and the claims satisfied Notification No. 102/2007-Cus. The exemption notification conferred a substantive entitlement that could not be curtailed by circular instructions, while the circulars could regulate only procedure. The sanction of refund by way of re-credit was therefore proper, and the Revenue's challenge failed.

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Issues: Whether refund of Special Additional Duty by way of re-credit in the respective licences/scrips was admissible when the re-credit and utilisation were completed within the time extended by departmental circulars, and whether such right under the exemption notification could be curtailed by circular instructions.

Analysis: The refund claims were found to satisfy the conditions of Notification No. 102/2007-Cus. The record showed that the re-credits were granted before the extended cut-off date and there was no material to show that any re-credit was allowed after the expiry of the extended period. It was also noted that the notification did not require initial payment of the duty only in cash. Departmental circulars could regulate the procedure, but they could not take away a substantive entitlement conferred by the exemption notification.

Conclusion: The sanction of refund by way of re-credit was proper and the Revenue's challenge failed.

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