DEPB debit treated as cash payment, preserving refund entitlement where the claim was filed within limitation.

Debit of a DEPB scrip was treated as equivalent to cash payment for purposes of the customs exemption and MODVAT credit scheme, so the Revenue's objection could not defeat refund of the later cash remittance. The refund claim was also within the six-month limitation period under Section 27 of the Customs Act because the cash payment was made on 19.07.1999 and the claim was filed on 27.08.1999. On that basis, the refund was held admissible and not time-barred.

---

---

Issues: (i) Whether duty paid by debit to DEPB scrips was to be treated as equivalent to payment in cash for entitlement to MODVAT credit and consequential refund of the amount later remitted in cash. (ii) Whether the claim for refund was barred by limitation under Section 27 of the Customs Act, 1962.

Issue (i): Whether duty paid by debit to DEPB scrips was to be treated as equivalent to payment in cash for entitlement to MODVAT credit and consequential refund of the amount later remitted in cash.

Analysis: The governing notification exempted imported goods from customs duty and additional duty subject to specified conditions under the DEPB scheme. The Court followed the earlier binding view that debit to a DEPB scrip, in the context of the DEPB and MODVAT schemes, stands on the same footing as payment of duty in cash. On that reasoning, the restriction suggested by the Revenue could not defeat the assessee's right to claim refund of the amount paid again in cash.

Conclusion: The issue was answered in favour of the assessee, and the direction to refund the cash payment was affirmed.

Issue (ii): Whether the claim for refund was barred by limitation under Section 27 of the Customs Act, 1962.

Analysis: The cash remittance was made on 19.07.1999 and the claim was made on 27.08.1999, which was within six months from the date of payment. On that factual basis, the statutory period under Section 27 was satisfied.

Conclusion: The refund claim was not barred by limitation.

Final Conclusion: The appeal failed, and the order directing refund of the cash amount was sustained.

Ratio Decidendi: Where duty paid through a DEPB debit is treated as equivalent to duty payment for the relevant exemption and credit scheme, a subsequent cash payment made out of caution is refundable if the statutory claim is lodged within limitation.

---