2016 (10) TMI 24 - HC - Customs

Disposal of refund claim - Special Additional Duty by way of cash refund and re-crediting the DEPB Licence - time limit prescribed for disposal of refund application by Board s Circular No.18/2013 dated 29.04.2013 by 30.06.2013, further extended upto September, 2013 - whether under the garb of circular issued by the CBEC, the benefit granted under the notification issued in terms of Section 25(1) of the Customs Act, 1962, can be modified or amended? - Held that - the decision in the case of ALLEN DIESELS INDIA PVT. LTD., v. UNION OF INDIA AND ORS. 2016 (2) TMI 247 - DELHI HIGH COURT is relied upon. Various Circulars issued by the CBEC, extending time or imposing additional restrictions for availing the exemptions cannot be legally sustained and ultra vires of the provisions of the Act and accordingly, the Circulars which were the subject matter of challenge in so far as they seek to deny the importers and exporters the refund of SAD paid by using DEPB scrips, are held to be invalid. Till date the respondents have not taken a decision on the petitioner s Application and the matter has been put in the cold storage, since 2013 - respondent directed to pass orders on the petitioner s refund claim within six weeks. - if refund is granted, applicable statutory interest should also be granted - petition disposed off - decided in favor of petitioner.

Summary

Issues:
Delay in passing refund orders by the second respondent.

Analysis:
The petitioner, a company, filed a Writ Petition seeking directions for the second respondent to decide on their refund claims submitted since May 2013. The petitioner claimed entitlement to a refund of the Special Additional Duty through cash refund or re-crediting the DEPB Licence, citing Circular No.18/2013. Despite two representations in December 2013 stating eligibility for cash refund due to the expiration of the DEPB scheme, no action was taken. The Writ Petition was filed in November 2015, and despite multiple adjournments, no counter affidavit was filed by the respondents.

In the case of ALLEN DIESELS INDIA PVT. LTD. v. UNION OF INDIA AND ORS., the Delhi High Court held that Circulars issued by the CBEC imposing additional restrictions for availing exemptions cannot be legally sustained and are ultra vires of the Customs Act. The Circulars denying refund of SAD paid by using DEPB scrips were deemed invalid. Drawing from this precedent, the High Court noted the inaction of the respondents since 2013 and directed the second respondent to decide on the petitioner's refund claim.

Consequently, the second respondent was instructed to review the petitioner's refund Application from May 2013, along with subsequent representations, and issue orders within six weeks from the receipt of the court's order. The court emphasized that if a refund is granted, statutory interest should also be provided. The Writ Petition was disposed of with no costs awarded.