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Issues involved: Stay application for operation of impugned order allowing refund of security deposit u/s Customs Act, 1962.
Summary: The Revenue filed a stay application against the impugned order allowing the respondent's appeal for refund of a security deposit made for a project contract for imports. The department argued that the refund of the security deposit is considered a payment of duty u/s 27 of the Customs Act, 1962, and should be regulated accordingly. The respondent contended that the provisions of Section 27 do not apply to the refund of such security deposits, citing Section 18 of the Customs Act. The respondent argued that the refund should be made suo motu if the duty already paid was found to be in excess after finalization of provisional assessment. Upon careful consideration, it was noted that Section 18 of the Customs Act allows for provisional assessment of duty on imported goods, and in case of excess payment, the duty shall be refunded suo motu upon finalization of assessment. The Commissioner (Appeals) relied on the Supreme Court's observations in the Mafatlal case regarding excess duty payments under Central Excise law. It was clarified that the provisions regarding refund of excess amounts collected on provisional assessment under Central Excise law do not directly apply to the Customs Act. The Tribunal concluded that no claim needs to be filed u/s 27 for obtaining a refund of a security deposit made for provisional assessment of goods at the time of import. As Section 27 does not apply to such refunds, the impugned order allowing the refund of the security deposit was upheld. The Revenue's stay application was dismissed as they did not establish a case for staying the operation of the impugned order.
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