Investigation deposits recorded by customs remain refundable when unappropriated and the related duty demand is set aside on appeal.

An investigation deposit recorded in departmental accounts may support a customs refund claim even without the original challan, where payment into the Government account is otherwise established. The notes state that a deposit not proposed for appropriation in the show-cause notice or appropriated in the adjudication order becomes returnable when the connected duty demand is set aside on appeal. They further identify the applicable refund framework and Board circular as governing deposits made during investigation.

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Issues: Whether the appellant was entitled to refund of Rs.3,00,000 deposited during investigation towards the alleged customs duty liability of an importer.

Analysis: The demand drafts handed over by the appellant were credited to the account of the Commissioner of Customs and recorded in the departmental C.B.R. sheet. Since the deposit was made through the investigating agency, rejection solely for want of the original challan was unsustainable, particularly when the departmental records evidenced receipt of the amount and the department had not shown that it was returned to the appellant. A demand draft accepted towards Government dues constitutes payment into the Government account.

Analysis: The deposit was neither proposed for appropriation in the show-cause notice nor appropriated in the adjudication order. The subsequent appellate order had set aside the duty demand against the appellant, although the penalty remained. Under the statutory refund framework and the applicable Board circular governing deposits made during investigation, the unappropriated deposit became returnable upon the favourable appellate determination.

Conclusion: The appellant was entitled to refund of Rs.3,00,000 deposited during investigation.

Ratio Decidendi: An investigation deposit evidenced by departmental records, which remains unappropriated and is connected with a duty demand subsequently set aside, is refundable; absence of the original challan cannot defeat the claim where payment is otherwise established.

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