Sentec India Company Private Limited Vs Assistant Commissioner of Customs (Delhi High Court)
Delhi High Court held that Extra Duty Deposit [EDD] is not in nature of customs duty and hence period of limitation for seeking refund of customs duty u/s. 27 of Customs Act, 1962 doesn’t apply to the same. Accordingly, refund granted and petition allowed.
Facts- The Petitioner had imported certain goods from Taiwan between 2014 and 2017. The Respondent/Department had suspected undervaluation of said goods and referred the same to the Special Valuation Branch, Delhi.
While those proceedings were pending, the goods in question were cleared on a provisional assessment basis on payment of Extra Duty Deposit [EDD] of 1% or 5% in terms of Circular 05/2016-Customs dated 9th February, 2016 read with Circular No. 11/2001-Customs dated 23rd February, 2001 and Circular No. 1/1998-Customs dated 01st January, 1998. According to the Petitioner, it had deposited ₹10,72,986/- in the form of EDD at that stage to facilitate the release of the goods.
The Petitioner has filed the present petition under Article 226 of the Constitution of India seeking the refund of ₹10,72,986/- which was deposited with the Customs Department as EDD.
Conclusion- Held that it is abundantly clear that EDD is not in the nature of customs duty. The deposit of the EDD was itself to secure any customs duty which may have been later on found to be payable, due to the allegation of under- declaration. However, when the said allegation has been disproved and the Department has taken a view that there was no under-declaration, the substratum of the deposit of EDD itself no longer exists. The impugned order holding that the refund application is beyond the limitation is, thus, untenable. Moreover, the impugned order itself acknowledges that the said amount is over and above with duty which was determined by the SVB. The Customs Department could not have rejected the prayer for EDD refund. Thus, the period of limitation for seeking refund of customs duty under Section 27 of the Customs Act, 1962, would not apply qua Under such circumstances, the prayer for relegating the Petitioner to the appellate remedy is also without merit. The petition is, accordingly, allowed.
