TaxTMI 
TaxTMI 
2026 (5) TMI 1112
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Goa. 2.1. Briefly stated, the facts of the case are that the respondents herein inter alia, are engaged in the manufacture of iron and steel products for which they had imported different grades/varieties of coal, in bulk form, from their overseas supplier M/s JSW International Tradecorp Pte. Ltd., (JSW ITPL) Singapore. For the purpose of 42 such consignments imported during the period 2014-2015 and 2015-2016, the respondents have filed 42 Bills of Entry (B/Es) at the port of Marmagoa port. Since the imports were from related party, the assessments were carried out by the customs authorities provisionally pending determination of influence of relationship on the declared assessable value in respect of import of goods supplied by JSW ITPL, Singapore to the respondents, under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 [hereinafter, referred to as "CVR, 2007", for short] read with Section 14 of the Customs Act, 1962. The goods were allowed clearance on provisional assessment basis by the customs authorities on execution of provisional duty bond along with security/bank guarantee and upon payment of 1% of declared assessable value as External Duty Dep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tom house on 30.03.2016. However, the said refund application was disposed off by the Assistant Commissioner of Customs vide letter F. No. S/ 99-106/15-Ap. dated 06.04.2016 stating that the said refund claim was scrutinised and it was found that refund has been filed in respect of 42 B/Es which have been assessed provisionally and these B/Es have not finalised till date. Further, it was stated therein that certain documents were not enclosed. Therefore, it was directed by the said Assistant Commissioner of Customs informing the respondents-importer to submit the refund application after getting all the B/Es finally assessed quantifying the refund amount entitlement in the prescribed proforma. The respondents refuted the aforesaid view of the Department and submitted that the refund claims have been filed only for the amount of EDD deposited by them at the time of assessment and clearance, pending verification of valuation by the SVB in terms of CBEC circular dated 23.02.2001. It was also submitted by the respondents that in terms of SVB order dated 09.09.2015, the declared value has been accepted and thus the EDD paid during the pendency of SVB investigation was refundable immediat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appellant department had filed this appeal before the Tribunal. 3.1 The learned Authorized Representative (AR) for Revenue reiterated the facts recorded in the appeal filed by the Department, stating that in response to the refund application dated 23.03.2016, the Department had found certain infirmities and accordingly vide office letter F. No. S/99/106/15-Appg. dated 06.04.2016 had directed the applicant respondents to submit the refund application after getting the B/Es finally assessed and after quantifying the refund amount entitlement in the prescribed proforma; that, in the order-in-original at paragraph 2.8, the original authority had also recorded that the complete refund application was filed in the prescribed proforma on 05.05.2017 after final assessment of the 42 B/Es. The refund was duly sanctioned on 27.07.2017 within 3 months from the date of refund application submitted in the prescribed proforma along with required documents i.e., before 04.08.2017. Therefore, he contended that the respondents importer are not eligible for grant of interest on delayed payment of refund in terms of Section 27A of the Customs Act, 1962. 3.2 Learned AR further stated that the Re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Original EDD payment challans in respect of their claim of EDD refund; (iv) self-attested copies of EDD challans in respect of 6 B/Es paid through EDI online system; (v) Self-attested copies of triplicate B/Es in respect of 42 B/Es for which EDD refund was claimed (vi) self-attested copies of invoices in respect of 42 B/Es covered in the refund application. The claim for refund in this case has been filed requesting for consequential refund of EDD for an amount of Rs.21,17,32,793/- paid at the time of provisional duty assessments duly acknowledged by the department on 30.03.2016, and the claimed refund amount has also been duly sanctioned and paid, but after much delay. In the said refund application, it has been specifically mentioned that the refund of EDD is arising on account of transaction value being found as correct and acceptable to the Department in terms of SVB order dated 09.09.2015. Additionally, it was held in the said order dated 09.09.2015, that the respondents were eligible for the refund of 1% EDD paid the time of provisional assessment and the same may be claimed as per the provisions of Section 27 of the Customs Act, 1962. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble to be paid upon finalisation of SVB investigation, would be entitled to be refunded to the respondents; or such duty paid at the provisional assessment stage being deficient to finally assessed duty would be liable to be paid by the respondents to the Department in terms of Section 18(4) ibid. In addition to this, 1% EDD paid in terms of CBEC circular Customs dated 09.02.2016, during the time of provisional assessment pending finalisation of SVB investigation, would also become refundable to the respondents upon completion of such SVB investigation. He stated that these are also evident in the various orders passed by the original authority both on account of finalisation of SVB investigation and upon finalisation of provisional assessments on account of other factors viz., testing and analysis, submission of certificate on demurrage/dispatch, draft survey reports about the actual quantity of imports etc. Further, he stated that the instructions issued by the CBEC vide F. No. 512/5/72-Cus.VI dated 23.04.1973; F. No. 511/7/77-Cus.-VI dated 09.01.1978, also states that provisional assessments must be finalised expeditiously, well within 6 months. Thus, he claimed that under no ci....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... B/Es were finalised with the delay, and the same is contrary to Para 3.1 of Chapter 7 of the CBIC Customs Manual issued under Section 151A of the Customs Act, 1962, which mandates expeditious finalisation of B/Es within 6 months. Therefore, he claimed that the observation made in the said judgement that the CBEC circular being binding on the Revenue, the Department cannot act contrary to the same, and even though Section 18 ibid prescribes no limitation period, finalisation of B/Es must be done within a reasonable time. He also brought to the attention of the Tribunal, that the said judgement was challenged by the Department before the Hon'ble Supreme Court and vide order dated 10.01.2025, the said appeal was dismissed on merits; even a review petition filed by the Revenue, against the said order also came to be dismissed by the Hon'ble Supreme Court on 02.09.2025. Therefore, he pleaded that there is no infirmity in the impugned order granting interest on delayed refund of EDD to the respondents. 4.6 Furthermore, Learned Advocate also submitted that 1% EDD was collected from the respondents separately and for a specific purpose i.e., for timely submission of documents relevant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to the respondents or not; (iii) if any interest is payable on account of delay in the above refund, then for what period such interest under Section 27A ibid, is payable? 7. The period of dispute in the present case is from May, 2014 to September, 2015, as the 42 B/Es covered under the present dispute were filed under Section 46 ibid during the period 20.05.2014 to 10.09.2015 with details of B/Es furnished by the respondents as Annexure-B in the refund claim dated 23.03.2016. Besides the above, details or six orders in original issued in finalization of B/Es also provide the following details of duty paid provisionally, finalized duty as well as EDD paid by the respondents: Sr. No. B/E No. and date Provisionally assessed Finally assessed Duty Diff. refundable EDD at 1% paid Order No. Ref. (Amount in Rupees) Financial Year 2014-2015 1 5543846 20/05/2014 37990886 37982224 -8662 5502209 2 2 5691359 03/06/2014 43089041 43827899 738848 6345229 3 3 5702613 04/06/2014 22724843 23035081 310238 4545770 5 4 6347887 05/08/2014 31819320 31826025 6705 4917746 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12 9967399 21/07/2015 49565916 49549260 -16656 6018648 6 13 2042308 27/07/2015 35540361 35540361 0 4541671 3 14 2208896 11/08/2015 35344102 35705446 361344 4241860 4 15 2319338 21/08/2015 34775508 35159262 383754 4125941 3 16 2332319 22/08/2015 22608262 22768271 160009 2978962 3 17 2349152 24/08/2015 39132005 39652886 520881 4890577 3 18 2507483 07/09/2015 48011022 47965672 -45350 5888317 6 19 2555084 10/09/2015 41665323 41760251 94928 5352136 3 91399387 Order No. Reference Order 1 - 2 B/Es covered in Order-in-Original (O-in-O) No. 03/2017 dated 20.01.2017 Order 2 - 3 B/Es covered in O-in-O No. 21/2017-A.C.(B) dated 08.03.2017 Order 3 - 8 B/Es covered in O-in-O No. 24/2017- A.C.(A) dated 08.03.2017 Order 4 - 15 B/Es covered in O-in-O No. 158/2017- A.C.(A) dated 09.11.2016 Order 5 - 6 B/Es covered under O-in-O No. 163/2016 dated 30.11.2016 Order 6 - 8 B/Es covered under O-in-O No. 164/2016 dated 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....importer, exporter or any other person to produce any contract, broker's note, insurance policy, catalogue or other document, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and to furnish any information required for such ascertainment which is in his power to produce or furnish, and thereupon, the importer, exporter or such other person shall produce such document or furnish such information. (4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods. (5) Where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer or exporter regarding valuation of goods, classification or concession of duty availed consequent to any notification issued therefor under this Act and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed or re-assessed, as the case may be, and if the amount so paid falls short of, or is in excess of the duty finally assessed or re-assessed, as the case may be, the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be; (b) the case of warehoused goods, the proper officer may, where the duty finally assessed 65[or re-assessed, as the case may be,] is in excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty. (3) The importer or exporter shall be liable to pay interest, on any amount payable to the Central Government, consequent to the final assessment order or re-assessment order under sub-section (2), at the rate fixed by the Central Government under section 28AB from the first day of the month in which the duty is provisionally assessed till the date of payment thereof. (4) Subject to sub-section (5), if any refundable amount referred to in clause (a) of sub-section (2) is not refunded under that s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lation to a person, other than the importer, shall be construed as "the date of purchase of goods" by such person. (1A) The application under sub-section (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest in relation to which such refund is claimed was collected from, or paid by him and the incidence of such duty or interest, has not been passed on by him to any other person. (1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely :- (a) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order; (b) where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction; (c) where any duty i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette. Interest on delayed refunds. Section 27A. If any duty ordere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to as the provisional duty. If the importer or the exporter, as the case may be, executes a bond in an amount equal to the difference between the duty that may be finally assessed and the provisional duty and deposits with the proper officer such sum not exceeding twenty per cent of the provisional duty, as the proper officer may direct, the proper officer may assess the duty on the goods provisionally at an amount equal to the provisional duty. 3.Terms of the bond.- (a)Where provisional assessment is allowed pending the production of any document or furnishing of any information by the importer or the exporter, as the case may be, the terms of the bond shall be that such document shall be produced or such information shall be furnished within one month or within such extended period as the proper officer may allow, and the person executing the bond shall pay the deficiency, if any, between the duty finally assessed and the duty provisionally assessed. (b)Where provisional assessment is allowed pending the completion of any test or enquiry, the terms of the bond shall be that the person executing the bond shall pay the deficiency, if any, between the duty....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncy, if any, between the duty finally assessed or reassessed, as the case may be, and the duty provisionally assessed. (2) Where provisional assessment is allowed pending the completion of any test or enquiry, the bond referred to in regulation 2 shall contain an undertaking that he shall pay the deficiency, if any, between the duty finally assessed or reassessed, as the case may be, and the duty provisionally assessed. (3) Where provisional assessment is allowed pending the production of any document or furnishing of any information by the importer or the exporter, as the case may be, the bond referred to in regulation shall contain an undertaking that he shall produce such document or information within one month or within such extended period as the proper officer may allow, and the person executing the bond shall pay the deficiency, if any, between the duty finally assessed or re-assessed, as the case may be, and the duty provisionally assessed. Regulation 4. Surety or security of the bond. - The proper officer may require that the bond to be executed under these regulations may be with such surety or security, or both, as he deems fit. Regul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion by the proper officer, as the case may be. (2) The proper officer shall within fifteen days from the date of such order of provisional assessment, inform the importer or the exporter, in writing, the specific details of the information to be furnished or the documents to be produced. (3) The proper officer may, for reasons to be recorded in writing, allow a further period not exceeding three months, on his own or at the request of the importer or the exporter, in case the documents or information are not made available within the time period specified in sub-regulation (1). (4) The Additional Commissioner or Joint Commissioner of Customs, may further extend the time period referred for another three months, in case the documents or the information required to be submitted by the importer or the exporter or requisitioned by the proper officer have not been made available within the period as allowed above by the proper officer. (5) The Commissioner of Customs, may extend the time period further as deemed fit, in case the documents or the information required to be submitted by the importer or the exporter or requisitioned by the proper office....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (3) This regulation shall not apply to such cases of provisional assessments, where Board has issued directions to keep that pending. Regulation 6. Manner of finalisation of provisional assessment. - (1) The provisional assessment shall be finalised as per the provisions of section 18 of the Act. Provided that if the amount so paid at the time of provisional assessment or after adjustment under clause (a) to sub-section (2) of section 18 of the Act, falls short of the duty finally assessed or re-assessed, as the case may be, and the importer or the exporter has not paid the deficiency, the shortfall shall be adjusted from the security, if any, obtained at the time of provisional assessment, under intimation to the importer or the exporter,: Provided further that, if the amount so adjusted or paid falls short of the duty finally assessed or re-assessed, as the case may be, the importer or exporter of the goods shall pay the shortfall in terms of the provisions of section 18. (2) The Bond executed at the time of provisional assessment with security, if any, shall be cancelled after finalisation of provisional assessment and the se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ms was paid. (2) The application shall be scrutinised for its completeness by the Proper Officer and if the application is found to be complete in all respects, the applicant shall be issued an acknowledgement by the Proper Officer in the prescribed Form appended to these regulations within ten working days of the receipt of the application. (3) Where on scrutiny, however, the application is found to be incomplete, the Proper Officer shall, within ten working days of its receipt, return the application to the applicant, pointing out the deficiencies. The applicant may resubmit the application after making good the deficiencies, for scrutiny. Explanation . - For the purposes of payment of interest under section 27A of the Act, the application shall be deemed to have been received on the date on which a complete application, as acknowledged by the Proper Officer, has been made." 8.2 At the outset, it is also made clear that in the above appeal the disputed period pertains to post introduction of 'self-assessment' concept under the definition clause of 'assessment' in Section 2(2) ibid as well as in the legal provisions contained in Section 17 ibid relati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fication by the proper officer of the Customs and may lead to reassessment by the proper officer of Customs, if it is found to be incorrect. However, in case an importer or exporter is not able to make self-assessment in terms of Section 17(1) ibid, then he may request in writing to the proper officer for assessment. 8.5 Similarly the legal provisions in respect of provisional assessment of duty under Section 18 ibid provide for certain situations in which provisional assessment of duty is resorted to. In terms of Section 18 ibid, in case the proper officer is not able to verify the self-assessment or make reassessment of duty or he deems it necessary to subject any imported or export goods to any chemical or other tests or where necessary documents have not been furnished or information has not been furnished and the it is necessary to make further enquiry, he may direct that the duty leviable on such goods be assessed provisionally. Customs (Provisional Duty Assessment) Regulations, 2011 have been notified to prescribe conditions for allowing provisional assessment, terms of bond to be executed with security, penal provisions etc. A penalty of upto Rs.50,000 may be imposed on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....I-1978 and Circular No. 17/2011-Cus., dated 8-4-2011]. 8.7 In terms of the CBEC's instructions vide F.No.512/5/72- Cus.VI dated 23.04.1973 and F. No. 511/7/77-Cus.VI. dated 09.01.1978, the provisional assessments must be finalized expeditiously, well within 6 months. Thus, it could be inferred that even though there is no specific time limit prescribed in the Regulations of 1963/2011, either for submission of documents by the importer or for finalizing the provisional assessment by the proper officer of customs, the endeavour of the department is to obtain finalization of provisionally assessed duties at the earliest as may be possible under the Customs statute. This also becomes clear from the subsequent Customs (Provisional Duty Assessment) Regulations, 2011, introduced with effect from 25.11.2001, where it is specifically provided that in case of provisional assessment which is pending the production of any document or furnishing of any information by the importer or the exporter, the bond referred to in regulation shall inter alia, contain an undertaking that he shall produce such document or information within one month or within such extended period as the proper officer m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny higher deposit being insisted. 10. Furthermore, where provisional assessment is being resorted to, the investigation and finalisation of the assessment must be completed within four months from the date of reply. If no decision is taken within 4 months, the extra duty deposit should be discontinued and the concerned Deputy Commissioner/Assistant Commissioner will be held responsible for inexplicable delay in finalisation." 9.2 Further, in the subsequent instructions issued prescribing the procedure for investigation of related party transactions in import cases under SVB, the CBEC had issued one another circular No.5/2016-Customs dated 09.02.2016, where the procedure of obtaining EDD in case of provisional assessments have been elaborately explained. Even though this circular has been issued four months subsequent to the disputed period, for understanding the nature of EDD and its implication in refund of the same, for the purpose of the appreciation of issues under dispute, it would be useful to refer the same. The relevant paragraphs of the said circular has been extracted and given below: Circular No. 5/2016 -Customs F. No. 465/12/2010-Cus V Government of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eposits' (EDD) in cases where SVB investigations are undertaken. It has been taken into consideration that 'Extra Duty Deposit' @ 1% of declared assessable value is being obtained from the importer for a period of 4 months during which time he is required to submit required documents and information to the SVB. In the event of his failing to do so, the EDD can be increased to 5% till such time the importer complies. Upon the importer complying with the requisition for documents and information, Circular 11/2001 - Cus dated 23.2.2001 provides that EDD shall be discontinued, while imports will continue to be assessed provisionally till the completion of investigations. In other words, the imports were continued to be assessed provisionally on the basis of a PD Bond but without any EDD. It has also been noted that many importers have represented on delays in dispensing of EDD, even though they have provided the required information and a period of 4 months has passed without the case having been decided. Therefore, the Board has decided that while reference to SVB requires the assessments to be provisional, for the sake of reducing transaction cost and bringing uniformity ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....deposit of certain sum, being the prescribed percentage of differential duty between the provisionally assessed duty and the duty that may be finally assessed, which is taken as security under Customs (Provisional Duty Assessment) Regulations, 1963/2011. Therefore, we are of the considered view that the provisions relating refund of 'duty' as contained in Section 27 of the Customs Act, 1962 and those relating to "Extra Duty Deposit" arising on account of ordering of provisional assessment of duty till finalization of such provisional assessments for determination of duty finally payable by the importer under Section 18 ibid, in respect of SVB cases implemented through CBEC Circular cannot be equated to as "duty". Further, EDD is secured by Revenue for a specific purpose of obtaining the documentation in time, for enabling timely finalization of provisional assessments by the department, whereas the "duty" and "security of duty" are determined by the proper officer of customs for securing the payment of the deficiency, if any, between the duty as may be finally assessed or re-assessed, as the case may be, and the duty provisionally assessed. Therefore, we are also of the prima facie....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... were accepted, the EDD amount is refundable and it is not dependent on finalization of provisional assessment on account of other reasons. Further, since the purpose and the manner of collection of EDD is to ensure timely submission of information, in cases where the EDD is not required to make the deficiency of finally assessed duty, in our considered view, the same is refundable to the importer, by applying legal provisions of Section 18 ibid mutadis mutandis to EDD as it applies to the duty, as EDD is collected for purpose of Section 18 ibid. 9.4 On careful perusal of legal provisions of Section 18 ibid and the notes on clauses explaining the rationale and purpose of introducing the provision, as seen from the Notes furnished by the Ministry of Finance submitted before the Standing Committee on Finance (2005-2006) in its Twenty Seventh Report dated 13.12.2005, and the Statement of Objects and Reasons of the Taxation Laws (Amendment) Bill, 2005 it transpires that the amendments were made to provide for a separate, self-contained machinery provision to handle payment of deficient duty or refund of excess duty, as the case may be, while finalizing the provisionally assessed dut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icing remains unchanged and that on the expiry of 3 years from the date of this order, if there was no renewal, then the said order stands expired and the assessing groups may resort to provisional assessment again with EDD equivalent to 1% of the assessable value. Thus, the order dated 09.09.2015 applied to all import transactions of the respondent importer from the said supplier of Singapore for the financial year 2014-2015 as well as for 2015-2016, 2016-2017 and 2017-2018. These orders finalizing the aspect of valuation of imported goods for the purpose of determining the relationship having influenced the transaction value or otherwise, was neither reviewed by the department nor had been appealed against by the respondent importer; further the direction in the said order for finalization of provisional assessments have also not been implemented. It is also important to note that the finalization of provisional assessments have to be done by the proper officer of customs expeditiously, when there is nothing more to be done for finalizing the provisionally assessed B/Es in having accepted the transaction value, which have already been declared and the applicable duty had been pai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ocuments have not been furnished viz., (i) working sheet for claim of refund amount; (ii) document establishing Applicants eligibility to receive the refund such as chartered accountant certificate; (iii) self-declaration stating that the Applicant has not claimed refund earlier along with speaking order/direction for the said refund; (iv) undertaking that refund claim has not been claimed earlier, and if found otherwise, then to pay back the refund to the Department; (v) original copies of B/Es; and (vi) original duty paid challans. Accordingly, the said Assistant Commissioner of Customs (Refund) informed the respondent importer with copy marked to their Customs Broker, stating that the refund claims 'stands disposed off' in terms of Section 27 ibid as being incomplete, vide his letter dated 06.04.2016. 9.8 On plain reading of sub-section (2) of Section 27 ibid, it transpires the said legal provision mandates the Assistant/Deputy Commissioner of Customs, on receipt of refund claim application, to satisfy himself whether the whole of any part of the duty or interest paid by the applicant is refundable or otherwise, and if ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icer, once the deficiencies pointed out had been removed, then there is no possibility for rejecting the refund without passing an order as provided under sub-section (2) to Section 17 ibid. Therefore, in our considered view, both for want of legal validity and on the factual matrix of having provided all the said documents that was said to have been deficient, along with the refund claim application initially submitted except for the finalization of provisional assessment for which specific directions has been given in the Public Notice No. 5/2012, dated 17.01.2012, the reply letter of Assistant Commissioner of Customs (Refund) dated 06.04.2016, in treating the refund claim as disposed of, is improper and does not stand legal scrutiny. Furthermore, the action of the proper officer of customs to be taken, in respect of finalization of provisional assessments upon receipt of refund claim by completing it within five working days, has been mandated under Public Notice No.5/2012, dated 17.01.2012. Thus, the department cannot take shelter under the technicalities of non-finalization of provisional assessment, which is not at the hands of respondent importer. Further, having provided al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id six orders are extracted and given below: Order 1 - 2 B/Es covered in Order-in-Original (O-in-O) No. 03/2017 dated 20.01.2017 - Paragraph 6(v) Order 2 - 3 B/Es covered in O-in-O No. 21/2017-A.C.(B) dated 08.03.2017-Para 6(v) Order 3 - 8 B/Es covered in O-in-O No. 24/2017- A.C.(A) dated 08.03.2017-Para 6(vi) Order 4 - 15 B/Es covered in O-in-O No. 158/2017- A.C.(A) dated 09.11.2016-Para 7(v) Order 5 - 6 B/Es covered under O-in-O No. 163/2016 dated 30.11.2016-Para 7(vi) Order 6 - 8 B/Es covered under O-in-O No. 164/2016 dated 30.11.2016- Para 6(v) Order No.1 Order No.2 Order No.3 Order No.4 Order No.5 Order No.6 10.3 From the above portion of the various orders passed by the proper officers whose finalization was stated to be deficient by the Deputy Commissioner scrutinising the refund claim filed by the respondent importer, it also evidentially proved that finalization of provisional assessment which was shown as deficient, was actually had nothing to do with the refund of EDD. This also evident in the CBEC Circular No.5/2016Customs at para 3.2 (supra) wherein it was dir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the file movement and ensure that the claim is settled within the statutory period. Any difficulties faced by the Trade or Officers in this regard may be brought to the notice of ADC/Refund. [Commissioner of Customs (Import), ACC, Mumbai, Public Notice No. 5/2012, dated 17-01-2012]" On careful perusal of the above, we are of the considered view that the Assistant Commissioner who has processed the refund application ought to have, instead of returning the refund for being deficient, either requested the concerned appraising group to issue a speaking order for finalization of assessments as provided in the above PN under Section 18(2) of the Act, within the prescribed time and pass necessary orders on the refund claim as per law. This course of action would have been consistent not only with the legal provisions but also the various decisions of the Hon'ble High Courts in the matter of refund of EDD. Therefore, in our considered view, nonpayment of refund of EDD within three months from the date of receipt of the refund claim, complete in all respects, as evidenced in the annexures and supporting documents, at the Custom House, Marmagoa on 30.03.2016, is saddled with the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the Bill of Entry re-assessed. Refund Section officer after scrutinizing the refund claim, if required, shall forward the file to concerned assessing group for re-assessment/finalization/amendment. Assessing group will re-assess the Bill of Entry on priority basis within five working days. Concerned Group should get the deficiencies rectified, get documents or indemnity bond from applicant where-ever required within such period. In case assessing group further notices any discrepancies while re assessing/finalizing the Bill of Entry the same may be intimated to Refund Section. Refund Section will monitor the file movement and ensure that the claim is settled within the statutory period. Any difficulties faced by the Trade or Officers in this regard may be brought to the notice of ADC/Refund. [Commissioner of Customs (Import), ACC, Mumbai, Public Notice No. 5/2012, dated 17-01-2012]" In our view, the above course of action would be perfectly in accord with the ratio laid down in the case of ITC, particularly para 47 of the said judgement, which has been quoted and applied by the Hon'ble Bombay High Court in Dimension Data case. 18. Before parting with the matter,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are placed on record, is not at all a justifiable reason in the light of Board's own Circular as quoted by the learned Single Judge. No such material has been placed before this court to justify the action of the Customs Department not to finalise the Provisional Assessment for 16 years and even by now to keep the EDD a mere Security Deposit by Importer/ Petitioner with them like this. 9. The direction of the learned Single Judge, is, therefore, perfectly justified and does not call for any interference by this court in the present intra-court Appeal. Such an innocuous and correct direction of the learned Single Judge is also not complied with by the Revenue Department so far even though there was no interim order in favour of the Customs Department against the order of the learned Single Judge. 10. Section 27A of the Act provides that interest to be paid on such refund to be not below 5% and not exceeding 30% per annum may be fixed. It has also been brought to our notice that vide Notification 75/2003-Cus.(NT) dated 12th September 2003, issued under Section 27A of the Act the interest at the rate of 6% has been fixed by the Central Government. 11. Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t, the refund is not sought for the excise duty paid in excess of what was payable under law. The refund was sought in respect of the additional value insisted upon by the department being the value of technical knowhow and royalty. It was added to the excise duty payable. When the assessee authority held that the customs duty paid by the assessee was proper and no additional duty need be paid, they were under an obligation to refund this additional amount which was collected, which had no basis. In such circumstances, Section 27 is not attracted. That is the view taken by the appellate authorities relying on the judgment of the Tribunal earlier. Therefore, the impugned order is legal and valid and does not suffer from any legal infirmity which calls for interference, No substantial question of law arises for consideration. Accordingly, appeal is dismissed." (3) Nittan India Tech Pvt. Ltd.Vs. Deputy Commissioner of Customs (Refund), Chennai reported in (2025) 34 Centax 104 (Mad.) "9. It is further submitted that the Extra Duty Deposit (EDD) is merely a deposit and not customs duty payable on the importation of goods in terms of Section 12 of the Customs Act, 1962.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dents are directed to complete the proceedings within a period of six months from the date of receipt of a copy of this order." 11.4 We also find that the judgment of the Hon'ble Supreme Court in Mafatlal Industries Ltd. Vs. Union of India - 1997 (89) E.L.T. 247 (S.C.) have not dealt with the refund of EDD, as they had dealt with in the said case three types of levy of duty i.e. unconstitutional levy of duty, duty levied under erroneous interpretation of law and duty levied under mistake of law. Therefore, we are unable to take guidance from the aforesaid judgement for dealing with the present issue. This may be seen from the relevant paragraph of the said judgment of the Hon'ble Supreme Court referred above. "131. As stated by me earlier in Paragraph 5 of this judgment, the claims for refund can be classified broadly into 3 groups. They are - (I) the levy is unconstitutional - outside the provisions of the Act or not contemplated by the Act. (II) the levy is based on misconstruction or wrong or erroneous interpretation of the relevant provision of the Act, Rules or Notifications; or by failure to follow the vital or fundamental provisions of the Act o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... IMPUGNED FINAL JUDGMENT AND ORDER DATED 04-03-2024 IN WPT NO. 5161/2022 04-03-2024 IN WPT NO. 4340/2022 PASSED BY THE HIGH COURT OF JHARKHAND AT RANCHI] UNION OF INDIA & ORS. PETITIONER(S) VERSUS M/S BIHAR FOUNDRY AND CASTINGS LTD. RESPONDENT (S) (IA NO. 294837/2024 - CONDONATION OF DELAY IN FILING) Date : 10-01-2025 This matter was called on for hearing today. CORAM : HON'BLE MRS. JUSTICE B. V. NAGARATHNA HON'BLE MR. JUSTICE SATISH CHANDRA SHARMA For Petitioner (s) Mr. N. Venkataraman, A.S.G. Mr. Gurmeet Singh Makker, AOR Mr. Akshat Gupta, Adv. Ms. Agrimaa Singh, Adv. Mr. Udai Khanna, Adv. Ms. Aishwarya Sinha, Adv. For Respondent (s) UPON hearing the counsel the Court made the following ORDER Despite there being a delay of 179 days, we have nevertheless heard learned counsel for the petitioner on the merits of the matter also. We do not find any merit in the Special Leave Petition. Hence, the Special Leave Petition is dismissed both on the grounds of delay as well as on merits. Pending application(s), if any, shall stand disposed of. (DIVY....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isation of provisional assessment, the same was specified in terms of general instructions issued from time to time for implementation of the provisions of the Act under Section 151A ibid by the Board. In the various instructions issued from time to time as discussed in preceding paragraphs at 8.6 and 8.7, provisional assessments are required to be finalised expeditiously, well within 6 months. In respect of provisional assessments being resorted to for investigation and finalisation of the assessment on SVB cases, time limit of 4 months from the date of reply given by the importer has been provided vide Circular No.11/2011Customs dated 23.02.2001. In the light of the above and as per the judgements of the Hon'ble Supreme Court referred in the paragraph 10.4 above, we are of the view that the plea advanced by the learned AR that there is no time limit for finalisation of provisional assessment is incorrect and is not valid in terms of the above legal provisions in force during the relevant period of dispute. 12.2 Further, in the case law of the Commissioner of Customs, Mangaluru Vs. JSW Steels Limited (supra) relied upon by the learned AR, the facts indicate that importer did no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid the EDD at 1% at the time of provisional assessment and that upon finalization of SVB investigation accepting the declared value as confirming to Rule 3 of CVR, 2007 in terms of a speaking order passed by proper officer of DGV, are eligible for refund of EDD immediately. Besides the above, if the respondents importer are eligible for the excess duty paid at the time of provisional assessment having been found in excess of the finally assessed duty, then they become entitled to refund of such amount of excess duty paid in terms of Section 18(2) ibid. 12.4 We also find from the provisions of sub-sections (3), (4) and (5) to Section 18 ibid, was introduced through Taxation Laws (Amendment) Act, 2006 w.e.f. 13.07.2006, and that these provide for a mechanism to regularise the payments of duty short levied and interest thereon as well as duties that are to be refunded on finalisation of a provisional assessment and interest, if any payable thereon for delay. Thus, it is crystal clear that upon finalization of assessment of imports which are initially provisionally assessed, in case where the duty paid initially is in excess than the duty finally assessed by the proper officer of c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in 3 months from the date of assessment/re-assessment of duty finally till the date of refund of such amount. From the facts on record, it transpires that the customs duty payable under 42 B/Es have been provisionally assessed initially at the time of import for various reasons, including the SVB investigation. The finalisation of such provisional assessment by the proper officer was issued vide Order-in-Original No.82/ADC/SVB/BT/2015-16 dated 09.09.2015; and again re-assessed vide various orders by the Assistant/Deputy Commissioners of appraising group vide Orders-in-Original No. 03/2017 dated 20.01.2017; No. 21/ 2017 -A.C.(B) dated 08.03.2017; No.24/2017A.C.(A) dated 08.03.2017; No. 158/2017- A.C.(A) dated 09.11.2016; No. 163/2016 dated 30.11.2016 and No. 164/2016 dated 30.11.2016. Therefore, in terms of sub-section (3) to Section 18 ibid, the respondents importer have paid the interest due, wherever it was indicated that there was deficiency in payment of the amount. This is also recorded in the adjudication orders passed by the original authorities. Similarly, in terms of sub-section (4) to Section 18 ibid, the respondents importer are also eligible for interest for the period ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xpiry of a period of three months from the date of receipt of the application under Sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable. 10.It is a well settled proposition of law that a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision; there is nothing to be read in; nothing to be implied and there is no room for any intendment. [See: Cape Brandy Syndicate Vs. Inland Revenue Commissioners - (1921) 1 KB 64 and Ajmera Housing Corporation & Anr. Vs. Commissioner of Income Tax. (2010) 8 SCC 739]. 11. At this juncture, it would be apposite to extract a Circular dated 1st October 2002, issued by the Central Board of Excise & Customs, New Delhi, wherein referring to its earlier Circular dated 2nd June 1998, whereby a direction was issued to fix responsibility for not disposing of the refund/rebate claims within three months from the date of receipt of application, the Board has reiterated its earlier stand on the applicability of Section 11BB of the Act. Significant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity is attracted, should the liability arise, the legal provision for the payment of interest should be scrupulously followed." (Emphasis supplied) 12. Thus, ever since Section 11BB was inserted in the Act with effect from 26th May 1995, the department has maintained a consistent stand about its interpretation. Explaining the intent, import and the manner in which it is to be implemented, the Circulars clearly state that the relevant date in this regard is the expiry of three months from the date of receipt of the application under Section 11B(1) of the Act. xxx xxx xxx xxx 14. At this stage, reference may be made to the decision of this Court in Shreeji Colour Chem Industries (supra), relied upon by the Delhi High Court. It is evident from a bare reading of the decision that insofar as the reckoning of the period for the purpose of payment of interest under Section 11BB of the Act is concerned, emphasis has been laid on the date of receipt of application for refund. In that case, having noted that application by the assessee requesting for refund, was filed before the Assistant Commissioner on 12th January 2004, the Court directed payment of Statutory inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efund claim was received by the department on 30.03.2016, by sanctioning the same vide Order dated 27.07.2017; and that the interest at appropriate rate fixed by the Central Government under Section 27A ibid is payable on the amount of EDD, for the period of delay caused in refund of EDD beyond the three months' prescribed time limit. The period of delay for which interest is payable would be determined based upon expiry of three months from the date of adjustment of the finally assessed duty with the duty paid at the time of provisional assessment, by passing the order in SVB investigation issued vide Order-in-Original No. 82/ADC/SVB/BT/2015-16 dated 09.09.2015 i.e. from 08.12.2015, till the date of actual payment of such EDD refund amount to the eligible respondents importer i.e. up to 27.07.2017, inasmuch as actually no appeal had been filed against the order dated 09.09.2015 by Revenue and it had attained finality. Furthermore, the Revenue should have considered sanction of refund when the refund letter was filed on 30.03.2016, when it was quite clear that the issue of EDD arising on account of SVB had attained finality vide order dated 08.12.2015 and that there is no additiona....
X X X X Extracts X X X X
X X X X Extracts X X X X
....toms Act, 1962. v) Party is eligible for a refund of Rs. 1,07,73,132/-(Rupees One Crore Seven Lakhs Seventy Three Thousand One Hundred Thirty Two only) being 1% Extra Duty Deposit deposited by them at the time of provisional assessment as per the SVB Order No.82/ADC/SVB/BT/2015-16 dated 09.09.2015 Issued in F.No.S/9-53 GATT/2015 GVC dated 09.09.2015 Issued by Additional Commissioner of Customs, GATT Valuation Cell Mumbai. The refund may be clalmed as per the provisions of Section 27 of Customs Act 1962. vI) This order is issued without prejudice to any other action likely to be taken under this Act, Regulation, Rules or any other Alled Acts/Rules/Regulations for the time being in force. 20/1/17 (PARINATI SUNKAR) Assit Commissionier of Customs (Appg) CUSTOM HOUSE, MARMAGOA F.No. P.A.Bond No.338/2014, 252/2015. To, M/s 25W:Steel Ltd, JSW Centre, Bandra Kurla Complex, Bandra (East), Mumbai, Maharashtra - 400 051. Copy to: 1. Asstt Commissioner,(Review Cell) Custom House, Marmagoa. 2. M/s Om Freight Forwarders (CHA), Marmagoa, 3. Office Copy. Document 2 ORDER 6, In view of the above, I pass the following Order 1) The goods declared In Table 1 para 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... declared value of all OB B/E mentioned in Sr No.01 to 08 of Table-1, PARA 2, above, In view of provisions of the Customs Valuation (determination of value of imported goods) Rules, 2007 and Section 14(1) of the Customs Act, 1962. These Bills of Entry-are finalized as per the Value mentioned In Column- 4 of the Table 3(A) & (B) (Para. 6) above under Sec.18 (2) of the Customs Act, 1962, and duty shall be paid accordingly. The total duty lability on these 07 B/E ( Sr No.1 to 07) Table 3{\A-) works out to Ra, 24,20,02,570 (Rupees Twenty Four crores Twenty Lakhs Two Thousand Five Hundred Seventy only). The importer has already pakt total duty of Rs. 24,02,04,3621, at the time of provisional assessment. They are flable to pay a differential duty of Rs.17,98,208/- (Rupees Seventeen lakhs Ninety Eight thousand Two Hundred Eight only) for these 07 Bills of Entry referred in Table 3, at para 6 above along with interest ot @18% from ist day of the month In which duty provisionally assessed till 31st of March 2016 and further Interest @15% w.e.f from 1st April 2016, till the date of payment thereof. The total interest works out to Rs. 5,70,635/-(Rupees Five Lakhs Seventy Thousand Six ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Bills of Entries mentioned at Sr No.1 to 15 of Table-1, PARA 2 above are to be finally assessed at the declared CTH and tariff rate. I reject the dedared value of all 15 B/E mentioned In. Sr No.1 to 15 of Table- 1, Para. 2, above, In view of provisions of the Customs Valuation (determination of value of imported goods) Rules, 2007 and Section 14(1) of the Customs Act, 1962, These Bilis of Entry may be finalized as per the Value mentioned In Colunin- 3 of the Table 3 (Para. 6) above under Sec.18 (2) of the Customs Act. 1962, and duty shall be pald accordingly. The total duty Ilability on these 15 B/E ( Sr No.1 to 15) works out to Rs. 51,40,75,277/- (Rupees Fifty One crores Forty lakhs Seventy Six thousand Two hundred erid Seventy Two only), The importer has already paid total duty of Ry. 51,09,39,856/- at the time of provisional assessment. They will be liable for differential duty of Rs. 31,36,416/- (Rupees Thirty One lakhs Thirty six thousand Four hundred Sixteen only) for these 15 Bils of Entry referred In Table 3, at para 6 above along with total Interest works out to Rsi. 11,16,554/-(Rupees Eleven lakhs Sixteen thousand Five hundred and Fifty Four only ) (calculated upt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessment. They are Ilable to pay a differential duty of Rs. 11,33,918/- (Rupees Eleven lakhs Thirty Three thousand Nine hundred Eighteen only) for these 06 Bills of Entry referred In Table 3, at para 6 above along with Interest at @18% from 19 day of the month In which duty provisionally assessed til 31" of March 2016 and further Interest @15% w.e.f from 1" April 2016, till the date of payment thereof. The total Interest works out to Rs. 2,41,723/-(Rupees Two Lakhs Forty One Thousand Seven Hundred Twenty Three only) (calculated upto 30.11.2016), and further Interest at @15% till date of payment thereof. Iv) The Importer vide letter Ref JSWSL/EXIM/GOA/15-16 dated 15.10.2015 paid differential duty of Rs.8,03,368/- and Interest of Rs.1,01,819/- (Total R.s.9,05,187/-) for Bill of Entry No 8313345/16.02.2015 referred in Table 3 (para 6) above vide demand draft No.713146 dated 15.10.2015 and the same was deposited In Govt treasury vide challan No.4409 dated 16.10.2015. v) The party is now liable to pay differential duty on remaining 05 Bills of Entry referred in Table 3, para 6 above amounting to Rs.3,30,550/-(Rupees Three - lakhs Thirty thousand Five hundred Fifty only) and Inter....