2006 (8) TMI 455 - AT - Customs

Summary

Issues:
1. Stay application for the operation of the impugned order.
2. Applicability of Section 27 of the Customs Act to a claim for refund of Extra Duty Deposit (EDD).
3. Interpretation of provisions of Section 18 of the Customs Act regarding provisional assessments and finalization.
4. Refusal of refund of EDD by the original authority and corrective action by the learned Commissioner (Appeals).

Analysis:
1. The department filed a stay application for the operation of the impugned order, which allowed a refund claim of the respondents regarding Extra Duty Deposit (EDD). The Tribunal summarily disposed of the stay application and proceeded with the appeal.

2. The learned Commissioner (Appeals) held that Section 27 of the Customs Act was not applicable to the respondents' claim for refund of EDD, citing a previous Tribunal decision. The department argued for the applicability of Section 27 but failed to address the precedent set by the Tribunal in a similar case. The Tribunal found that the provisions of Section 18 of the Customs Act govern the refund process for excess duty upon finalization of assessment, without requiring a formal claim for refund. The appellant's appeal lacked merit, and the Tribunal dismissed it.

3. The Tribunal examined the provisions of Section 18 of the Customs Act related to provisional assessments and finalization. It highlighted that the importer is entitled to a refund if the duty finally assessed is found to be in excess of the duty paid upon provisional assessment. The Tribunal emphasized that the money is liable to be refunded without a formal claim when the statute mandates refund upon finalization of assessment. The Tribunal noted that the original authority's refusal to refund the EDD was corrected by the learned Commissioner (Appeals) based on a Tribunal decision, indicating the correct application of the law.

4. The original authority's refusal to refund the EDD to the respondents was deemed illegal by the Tribunal, as it defeated the purpose of finalizing the assessment. The corrective action taken by the learned Commissioner (Appeals) aligned with the Tribunal's decision on a similar refund claim for EDD. The Tribunal found the department's appeal lacking in good faith and dismissed it, affirming the correctness of the learned Commissioner (Appeals)'s decision.