Refund under customs exemption notification fails where duty is discharged through export promotion scrips instead of cash payment.

Utilisation of export promotion scrips under the Foreign Trade Policy does not amount to payment of customs duty in cash for the purpose of refund under Notification No. 102/2007-Cus. The refund mechanism applies only where the imported goods are sold in the domestic market and the duty liability is discharged in the manner contemplated by the notification; a debit of scrips cannot substitute for such payment. The Tribunal followed its earlier view and treated the distinction between cash payment and scrip utilisation as decisive, while the cited Delhi High Court decision was distinguished on its facts and the effect of the relevant DGFT public notice.

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Issues: Whether the appellant was entitled to refund of special additional duty of customs when the import duty had been discharged by debit of scrips under the Foreign Trade Policy, and whether such debit could be treated as payment of duty for the purpose of Notification No. 102/2007-Cus.

Analysis: The refund mechanism under Notification No. 102/2007-Cus operates only after sale of the imported goods in the domestic market and on discharge of the duty liability in the manner contemplated by the notification. Debit of scrips under an export promotion scheme was held not to constitute payment of duty in cash, and therefore could not support a refund claim for the amount so debited. The earlier Tribunal view was followed, and the distinction between valid cash payment and utilisation of scrips was treated as decisive. The cited Delhi High Court decision did not assist because the factual setting and the effect of the relevant DGFT public notice were different.

Conclusion: The claim for refund to the extent the duty had been discharged by scrips was not maintainable, and the appeal was dismissed.

Ratio Decidendi: Utilisation of export promotion scrips does not amount to payment of customs duty for the purpose of claiming refund under a refund-linked exemption notification.

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