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Issues involved: Appeal against final order passed by CESTAT regarding refund application for excess cash security deposit u/s Customs Act, 1962.
Issue 1 - Consideration of legal issue in refund application: The Tribunal did not consider the legal issue that there cannot be an order of refund import application and that application should be within the time stipulated in the statute. Issue 1 Details: The refund application was filed by the importer for refund of excess cash security deposit for importing goods under Project Import Regulations. The application was rejected by the Deputy Commissioner of Customs (Refund) citing the limitation period under Section 27 of the Customs Act, calculated from the date of final assessment of duty. Issue 2 - Applicability of time limit to refund of security deposit: The Tribunal did not consider whether the time limit is applicable to the refund of security deposit and under what provision of law it should be refunded. Issue 2 Details: The Commissioner of Customs (Appeals) allowed the claim of refund by stating that the security deposit is not duty, hence Section 27 of the Customs Act is not applicable. The CESTAT confirmed this decision, emphasizing that the bank guarantee cannot be equated to payment of duty. Precedent and Legal Interpretation: The issues in this case are similar to the decisions in Commissioner of Customs v. Aristo Spinners Ltd. and Commissioner of Customs (Exports) v. M/s. Jraj Exports (P) Ltd. The court held that bank guarantee is not equivalent to payment of duty and Section 27 regarding refund of duty does not apply to bank guarantees. Conclusion: The appeal was dismissed as the questions of law were already covered by previous decisions against the department. No costs were awarded in this case.
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