2008 (7) TMI 694 - AT - Customs

Refund of extra duty deposit (EDD) - Held that - Section 27 regulates refund of excess duty deposit made by the importer. These provisions do not cover refund of a deposit made by an importer for any purpose including hearing of its appeal - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against Order-in-Appeal No. C.Cus.722/05 passed by the Commissioner (Appeals), Chennai regarding refund of extra duty deposit (EDD) made by importer.
2. Dispute over whether EDD is considered duty and falls under provisions of Section 27 of the Customs Act.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner (Appeals) regarding the refund of an extra duty deposit (EDD) made by an importer for provisional assessment of imported goods. The importer, M/s. Minerva Trade Links (P) Ltd., imported "RBD Palmolein" under Bill of Entry No. 33544 dated 24-12-99. The Bill of Entry was assessed provisionally, and the importer made an EDD of Rs. 1,80,478/- at the department's instance. Despite not being granted a refund of the deposit upon finalization of the provisional assessment, the original authority denied the refund citing the absence of a refund application. However, the Commissioner (Appeals) allowed the appeal filed by the importer, stating that the refund of the deposit was not regulated by Section 27 of the Customs Act, relying on a precedent in the case of Motor Industries Company v. CC, Chennai [2005 (188) E.L.T. 315 (Tri.-Bang)].

2. The Revenue disputed the Commissioner (Appeals)'s finding that the EDD is not considered duty and argued that the EDD was not a pre-deposit, thus falling under the provisions of Section 27 of the Customs Act. The Revenue contended that the order of the Commissioner (Appeals) should be set aside. However, upon hearing both sides, the Tribunal found that Section 27 specifically regulates the refund of excess duty deposits made by importers and does not cover the refund of deposits made for any purpose, including hearing of appeals. Therefore, the Commissioner (Appeals) was correct in ruling that the importer was eligible for the refund of the EDD. The Tribunal also cited the decision in the Motor Industries case, where it was held that the appellant was entitled to a refund of the duty deposit as the investigations confirmed the value shown in the invoices and the deposit was not passed on to the buyers of the goods. Consequently, the Tribunal dismissed the appeal filed by the Revenue, upholding the decision in favor of the respondents.

In conclusion, the Tribunal's judgment affirms that the refund of an extra duty deposit made by an importer for provisional assessment of imported goods is not governed by Section 27 of the Customs Act and is eligible for a refund, as evidenced by the precedent set in the Motor Industries case.