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2023 (1) TMI 599 - AT - CustomsRejection of refund of cash security deposit - rejection of refund on the ground that the appellant s claim was barred by limitation in terms of Section 27(1) of the Customs Act, 1962 - HELD THAT - It is not the case of the Revenue that what the appellant claimed was the refund of the duty paid and there is also no dispute that the appellant claimed only the security deposit made. The Hon ble jurisdictional High Court in the case of COMMISSIONER OF CUSTOMS (EXPORT), CHENNAI-1 VERSUS CABLE CORPORATION OF INDIA LTD. 2008 (6) TMI 210 - HIGH COURT OF JUDICATURE AT MADRAS has considered a similar issue and has held that Section 27 which speaks about the refund of the duty cannot be pressed into service to deny refund of the amount covered under the bank guarantee which has been negotiated by the department. Thus, it is very much clear that refund claim of the security deposit is not governed by the provisions of Section 27 of the Customs Act and consequently, the lower authorities have clearly erred in rejecting and confirming the rejection of refund claimed of the security deposit by invoking the provisions of Section 27(1) ibid. The impugned order is not sustainable and hence, the same is set aside - Appeal allowed.
Issues Involved:
Whether rejection of refund of cash security deposit, as confirmed in the impugned Order-in-Appeal, is correct? Analysis: The judgment revolves around the rejection of a refund claim for a cash security deposit by the Adjudicating Authority, which was subsequently upheld by the Commissioner of Customs (Appeals-II). The main issue for consideration was whether this rejection was justified. The appellant had imported goods through multiple Bills-of-Entry and sought a refund of the cash security deposit. The rejection was based on the claim being barred by limitation under Section 27(1) of the Customs Act, 1962. The appellant argued that the refund claim was not related to duty or tax paid, hence not subject to limitation. They contended that the finalization of Bills-of-Entry and communication of the same were essential for calculating any duty liability, and the refund claim was within the prescribed period from the date of communication. The appellant also cited legal precedents to support their argument. The Learned Advocate for the appellant emphasized that the refund claim was not duty-related and should not be subject to limitation under Section 27(1) of the Customs Act. They highlighted the sequence of events regarding the importation of goods, provisional assessment, and finalization by the Department. The appellant's position was that the communication of finalization was crucial for determining the limitation period for the refund claim. The appellant relied on various legal decisions to strengthen their case, including judgments from the Madras High Court. In contrast, the Learned Additional Commissioner for the Revenue supported the lower authorities' rejection of the refund claim, asserting that it pertained to a security deposit and should be upheld. The Tribunal analyzed the contentions of both parties and reviewed the legal precedents cited. It referenced a judgment by the Hon'ble jurisdictional High Court, which clarified that refund claims for security deposits are not governed by Section 27 of the Customs Act. The Tribunal concluded that the lower authorities had erred in rejecting the refund claim based on Section 27(1) and set aside the impugned order. The appeals were allowed, granting consequential benefits as per the law. This detailed analysis highlights the interpretation of relevant legal provisions, the significance of communication in refund claims, and the application of legal precedents in resolving the issue.
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