2020 (7) TMI 269 - AT - Customs

DEPB Scrip Refund Granted: Excess Customs Duty Refundable under Customs Act

M/s Paradeep Phosphates Ltd. Versus Commissioner of GST, CX & Customs, Bhubaneswar.

The Tribunal allowed the appeal, granting the appellant a refund of Rs. 43,95,212 paid through the DEPB scrip. The decision was based on precedents from ... Refund of excess Custom Duty paid through DEPB scrip - finalization of provisional assessment - part amount was withheld on the ground that the same was paid by the appellant from the DEPB Scrip and hence not refundable - section 27(1) of the Customs Act, 1962 - HELD THAT:- The CBEC Circular dt.29.04.2013, solely relied upon by the learned Commissioner (Appeals), for denying the refund, has been declared ultra vires by the Hon’ble Delhi High Court in the case of ALLEN DIESELS INDIA PVT. LTD. VERSUS UNION OF INDIA & ORS. [2016 (2) TMI 247 - DELHI HIGH COURT] and the Hon’ble Madras High Court in the case of M/S ENTERPRISES INTERNATIONAL LTD. VERSUS THE ASSISTANT COMMISSIONER OF CUSTOMS (EXPORTS) , THE DEPUTY COMMISSIONER OF CUSTOMS (REFUNDS) [2016 (10) TMI 24 - MADRAS HIGH COURT] - Besides, the Hon’ble Calcutta High Court in the case of M/S. RONAK OPTIK INDIA & ANR. VERSUS UNION OF INDIA & ORS. [2012 (9) TMI 992 - CALCUTTA HIGH COURT], have categorically held, that where an assessee is entitled in law to refund of tax paid, it is immaterial whether the payment is in cash or by debit of DEPB, and that the right to refund is not lost by reason of the DEPB scheme. The appellant is entitled to refund of the balance amount of ₹ 43,95,212/- which was paid from the DEPB scrip - Appeal allowed - decided in favor of appellant. Issues:Refund of excess custom duty paid through DEPB scrip.Analysis:The appeal was filed against an Order-in-Appeal by the Commissioner (Appeals) upholding the decision of the Dy. Commissioner regarding the refund of excess custom duty paid by the appellant on imported Rock Phosphates. The appellant imported raw materials for fertilizer manufacturing and paid custom duties on a provisional assessment basis. The Dy. Commissioner found an excess payment of Rs. 1,24,70,514, refunding a portion but withholding Rs. 43,95,212 paid via DEPB scrip. The appellant argued for full refund citing relevant case laws. The Commissioner (Appeals) upheld the decision based on a CBEC Circular. The appellant then appealed to the Tribunal.The main issue was whether excess custom duty paid through DEPB scrip is refundable under the Customs Act, 1962. The Tribunal analyzed the lower authorities' orders, grounds of appeal, and submissions. It noted that the CBEC Circular relied upon by the Commissioner (Appeals) had been declared ultra vires by the Delhi High Court and Madras High Court in previous cases. Additionally, the Calcutta High Court had ruled that the right to refund is not lost by using the DEPB scheme. Based on these precedents, the Tribunal concluded that the appellant was entitled to the refund of the balance amount paid from the DEPB scrip.The Tribunal set aside the impugned order and allowed the appeal, granting the appellant the refund of Rs. 43,95,212 paid through the DEPB scrip. The decision was made in accordance with the judgments of the High Courts and the provisions of the Customs Act, 1962.