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2020 (3) TMI 166 - AT - CustomsRefund of Excess Customs Duty paid through RTGS instead of re-crediting it in the DEPB licence - payment of excess customs duty due to valuation dispute - finally the transaction value as declared was accepted. - appellant contended that, since DEPB scrips had been withdrawn by the Director General of Foreign Trade, the re-credited scrips cannot be utilized by Artex Textile - Commissioner (appeals) allowed the appeal of the importer. HELD THAT - In this connection, it would also be appropriate to refer to a decision of the Tribunal in MK Agrotech Pvt. Ltd. v/s Commissioner of Customs- Mangalore 2019 (6) TMI 80 - CESTAT BANGALORE . The issue involved was whether refund could be allowed in cash, if duty was paid through DEPB scrips. - It was held in the case that both the authorities have wrongly held that refund cannot be paid in cash since the duty was paid through DEPB scrip. The scrips issued by the DGFT are freely tradeable in the open market and this enables exports the facility to encash the export incentives. The holder of the scrip could utilize these scrips for payment or discharge of duty liability at the time of importation of goods. Further the Bill of Entry for home consumption filed at the time of clearance of goods depicts the list of scrips utilized for payment of customs duty arising on the import of goods. Further I find that there is no provision anywhere under the Customs Act to re-credit these duty scrips at the time of refund. There is no infirmity in the order passed by the Commissioner (Appeals) that directs refund of duty by RTGS - Appeal dismissed - decided against Revenue.
Issues Involved:
1. Legitimacy of the Commissioner (Appeals) order directing refund through RTGS instead of re-credit in DEPB scrips. 2. Validity and utilization of DEPB scrips for refund purposes. 3. Applicability of relevant legal precedents and notifications. Issue-wise Detailed Analysis: 1. Legitimacy of the Commissioner (Appeals) order directing refund through RTGS instead of re-credit in DEPB scrips: The Commissioner of Customs challenged the Commissioner (Appeals) order dated 6 May 2019, which directed the refund of ?10,95,32,485.41/- to be disbursed via RTGS instead of re-crediting it in the respective licences. The Assistant Commissioner (Refund) had earlier sanctioned the refund claim of ?12,06,57,869/- but directed only ?1,11,25,383.83/- to be paid through RTGS, with the remaining amount to be re-credited to DEPB scrips. Artex Textile contended that since DEPB scrips had been withdrawn by the Director General of Foreign Trade, the re-credited scrips could not be utilized. The Commissioner (Appeals) supported this view, citing that the re-crediting process had been discontinued and that not allowing the refund through RTGS would effectively deny the refund. 2. Validity and utilization of DEPB scrips for refund purposes: The DEPB scheme was introduced under the Foreign Trade Policy, 2009-2014, to neutralize the incidence of customs duty on import content of export products. The scheme allowed exporters to apply for credit at notified rates of FOB value of exports. The notification dated 11 September 2009 governed the import of goods utilizing DEPB scrips, which was later amended to be valid only until 30 September 2011. A Circular dated 1 July 2011 confirmed that DEPB scrips could only be utilized until 30 September 2011. Thus, re-credits of DEPB scrips could not be utilized beyond this period, making the Department's claim to re-credit the refund amount impractical and effectively denying the refund to Artex Textile. 3. Applicability of relevant legal precedents and notifications: The Commissioner (Appeals) relied on the Delhi High Court decision in Allen Diesels India Pvt. Ltd. v/s Union of India, which invalidated certain Circulars that restricted refunds if duties were paid using DEPB scrips. The High Court held that such Circulars could not impose additional conditions not specified in the original notification. Similarly, the Tribunal in MK Agrotech Pvt. Ltd. v/s Commissioner of Customs and Commissioner of Customs v/s SEL Manufacturing Company Ltd. supported the view that refunds should be paid in cash if duties were paid through DEPB scrips, as there was no provision under the Customs Act to re-credit these scrips. These precedents reinforced the Commissioner (Appeals) decision to direct the refund through RTGS. Conclusion: The Tribunal found no infirmity in the Commissioner (Appeals) order directing the refund through RTGS, as the DEPB scrips were no longer valid and re-crediting them would deny the refund to Artex Textile. The Department's appeal was dismissed, affirming the Commissioner (Appeals) decision and aligning with the legal precedents that supported refunds in cash or RTGS when DEPB scrips were used for duty payments.
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