Receipt of discount / rebate due to defective machinery imported - claim of refund of customs duty

[Ashish Gupta]

Sir, In the year of 2009 we had imported one plant amounting Rs. 17 Crores. We had paid custom duty on the said value at the time of import of Plant. The plant has installed in our factory but due to some technical issues it is not running in full capacity till time and modification in design/structure etc is going on. On taking up this matter strongly with the supplier, the supplier has given us rebate of 10% amount i.e. Rs 1.70 crores. We have received said remittance through banking rout in dollars. Now we want to apply for refund of custom duty on the said rebate amount because now the value of plant has decreased by 10% and we have paid custom duty on the full value of plant. Kindly let us know how we should go for refund and under which section.

AI Summary

Company Seeks Customs Duty Refund on Reduced Machinery Value Citing Section 27 of the Customs Act, 1962 A company imported machinery worth Rs. 17 crores in 2009, paying customs duty on the full amount. Due to technical issues, the machinery did not operate at full capacity, leading to a 10% rebate from the supplier. The company seeks a customs duty refund on the reduced value. One respondent advises that a refund may be claimed under Section 27 of the Customs Act, 1962, with evidence of the rebate and proof that the duty burden was not passed to customers. Another suggests that unjust enrichment does not apply as the duty is on capital goods, and a writ petition could be filed if the refund is denied.