Invalid Circulars Restricting Exemptions; Refund Claim Decision Ordered.

The Delhi High Court in the case of ALLEN DIESELS INDIA PVT. LTD. v. UNION OF INDIA AND ORS. held that Circulars imposing restrictions on exemptions are invalid. The court directed the second respondent to decide on the petitioner's refund claim for Special Additional Duty since May 2013 within six weeks, with statutory interest if granted. The Writ Petition was disposed of without costs.

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Issues:
Delay in passing refund orders by the second respondent.

Analysis:
The petitioner, a company, filed a Writ Petition seeking directions for the second respondent to decide on their refund claims submitted since May 2013. The petitioner claimed entitlement to a refund of the Special Additional Duty through cash refund or re-crediting the DEPB Licence, citing Circular No.18/2013. Despite two representations in December 2013 stating eligibility for cash refund due to the expiration of the DEPB scheme, no action was taken. The Writ Petition was filed in November 2015, and despite multiple adjournments, no counter affidavit was filed by the respondents.

In the case of ALLEN DIESELS INDIA PVT. LTD. v. UNION OF INDIA AND ORS., the Delhi High Court held that Circulars issued by the CBEC imposing additional restrictions for availing exemptions cannot be legally sustained and are ultra vires of the Customs Act. The Circulars denying refund of SAD paid by using DEPB scrips were deemed invalid. Drawing from this precedent, the High Court noted the inaction of the respondents since 2013 and directed the second respondent to decide on the petitioner's refund claim.

Consequently, the second respondent was instructed to review the petitioner's refund Application from May 2013, along with subsequent representations, and issue orders within six weeks from the receipt of the court's order. The court emphasized that if a refund is granted, statutory interest should also be provided. The Writ Petition was disposed of with no costs awarded.

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