Special Additional Duty refund under import notification remains payable in cash despite DEPB debit payment

Refund of Special Additional Duty under Notification No. 102/2007-Cus was considered admissible in cash even where the duty had been discharged by debit in a DEPB scrip rather than by cash payment. The Tribunal followed the Delhi High Court ruling in Allen Diesels India Pvt. Ltd., which held that refund cannot be denied on that basis, and treated the contrary circulars as ultra vires to the extent they restricted cash refund. On that reasoning, the appellant was held entitled to cash refund of SAD under the notification.

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Issues: Whether refund of Special Additional Duty under Notification No. 102/2007-Cus was admissible in cash when the duty had been debited in the DEPB pass book and not paid in cash.

Analysis: The issue was held to be covered by the Delhi High Court decision in Allen Diesels India Pvt. Ltd., which had ruled that refund under Notification No. 102/2007-Cus cannot be denied merely because the duty was discharged through debit in the DEPB scrip. The cited circulars were held to be ultra vires the notification to the extent they curtailed cash refund. The Tribunal followed that binding view and distinguished the contrary decision relied upon by the Revenue as not having considered the High Court ruling.

Conclusion: The appellant was entitled to cash refund of SAD under Notification No. 102/2007-Cus even though payment had been made by debiting the DEPB scrip.

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