SEZ to DTA customs refund: excess duty, timely claim, no unjust enrichment, and delayed refund interest apply.

Excess basic customs duty and special additional duty paid on clearance of stainless steel scrap from an SEZ to the DTA may be refunded under the Customs Act where the levy arises on such clearance and the claim is otherwise maintainable. The text states that refund was treated as admissible because the claim was filed within the one-year limitation period and documentary evidence showed that the duty incidence had not been passed on, thereby defeating unjust enrichment. It also states that delayed processing of the refund attracted statutory interest under Section 27A of the Customs Act from the relevant date. The stated result is full refund with consequential interest.

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Issues: (i) whether excess basic customs duty and special additional duty paid on clearance of stainless steel scrap from the SEZ unit to the DTA were refundable under the Customs law; (ii) whether the refund claims were within limitation and not hit by unjust enrichment; and (iii) whether interest was payable on the delayed refund.

Issue (i): whether excess basic customs duty and special additional duty paid on clearance of stainless steel scrap from the SEZ unit to the DTA were refundable under the Customs law.

Analysis: Goods removed from an SEZ to the DTA are chargeable to customs duties under Section 30 of the Special Economic Zones Act, 2005, and excess duty so paid can be claimed as refund under Section 27 of the Customs Act, 1962. The inserted Rule 47(5) of the Special Economic Zones Rules, 2006 and the CBIC circulars recognized the competence of customs authorities to process such refund claims. The record also showed that the scrap was cleared for melting and the applicable exemption entries covered the goods.

Conclusion: The refund of excess basic customs duty and special additional duty was held to be admissible.

Issue (ii): whether the refund claims were within limitation and not hit by unjust enrichment.

Analysis: The claims were found to have been filed within the permitted one-year period. On unjust enrichment, the invoices, certificates, declarations, and chartered accountant certificates established that the incidence of duty had not been passed on to the buyers and had been borne by the assessee. The three conditions for grant of refund were therefore satisfied.

Conclusion: The refund claims were held to be within limitation and not barred by unjust enrichment.

Issue (iii): whether interest was payable on the delayed refund.

Analysis: Once the refund applications remained pending beyond the statutory period, interest became payable under Section 27A of the Customs Act, 1962 from the relevant date, as supported by the settled position on delayed refund interest.

Conclusion: Interest on the refunded amounts was held payable under Section 27A of the Customs Act, 1962.

Final Conclusion: The refund claims were allowed in full, with consequential reliefs including interest.

Ratio Decidendi: Excess customs duty paid on SEZ-to-DTA clearance is refundable under the Customs Act when the claim is timely and the incidence has not been passed on, and statutory interest follows on delayed refund.

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