Pre-deposit under Customs Act appeal provisions is refundable on success, and refund limits for duty do not apply.

A pre-deposit made under Section 129E of the Customs Act, 1962 for filing an appeal is not payment of duty but a security deposit linked to the appeal process. Section 27, which governs refund of duty paid or borne pursuant to assessment, therefore does not apply to such a deposit. Where the appeal succeeds, the amount retained by the customs authorities remains refundable in restitution, and the refund claim is maintainable. The Court directed refund of the pre-deposit and rejected the objection based on the proviso to Section 27.

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Issues: Whether an amount deposited as a pre-condition for appeal under Section 129E of the Customs Act, 1962 was refundable after success in appeal, and whether the refund was barred by the proviso to Section 27 of the Customs Act, 1962.

Analysis: The deposit made under Section 129E was only a security deposit with the proper officer for the purpose of preferring an appeal and did not amount to payment of duty in pursuance of an assessment order. Section 27, which governs refund of duty paid or borne, therefore did not apply to such a deposit. As the appeal had succeeded and the amount retained by the customs authorities represented only a refundable pre-deposit, the petitioner was entitled to restitution of the sum deposited.

Conclusion: The refund claim was maintainable and the amount deposited under Section 129E was directed to be refunded to the petitioner; the objection based on Section 27 failed.

Final Conclusion: The writ petition was allowed and relief was granted for refund of the deposited amount.

Ratio Decidendi: A pre-deposit made under Section 129E of the Customs Act, 1962 for filing an appeal is not payment of duty, and the refund restrictions applicable to duty paid under Section 27 do not govern such a deposit.

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