Refund Claim Valid for Customs Duty paid via DEPB Scrip: CESTAT Kolkata

Commissioner of Customs (Port) Vs New Way Vyapaar Private Limited (CESTAT Kolkata)

Introduction: The recent CESTAT Kolkata order in the case of Commissioner of Customs (Port) Vs New Way Vyapaar Private Limited addresses the rejection of a refund claim for customs duty paid through DEPB Scrip. This article provides an in-depth analysis of the order and the legal precedents supporting the refund claim.

Detailed Analysis:

1. Background and Key Issues:

• New Way Vyapaar Private Limited imported Sulphuric Acid Brown and cleared it for home consumption by paying customs duty, including SAD @ 4%.
• The duty was paid using DEPB license and cash proportionately, with a claim for SAD refund filed.
• A portion of the refund claim was sanctioned, but the remaining amount was rejected.

2. Legal Precedents and Circulars:

• The issue of refund for duty paid through DEPB Scrip was examined by the Hon’ble Delhi High Court in the case of Allen Diesels India Private Limited Vs. Union of India.
• Circulars issued by the C.B.E. & C. were discussed, clarifying the manner of refund and re-crediting of DEPB scrips.

3. CESTAT Order and Judicial Position:

• The Commissioner (Appeals) allowed the refund claim filed by New Way Vyapaar Private Limited.
• The CESTAT order upholds the Commissioner (Appeals) decision, citing the legal position established by the Hon’ble Delhi High Court and the Tribunal.
• The order emphasizes that circulars imposing additional restrictions for refund are ultra vires of the Act and cannot be legally sustained.
• The Tribunal, relying on past decisions, rejects the Revenue’s arguments against refunding duty paid through DEPB Scrip.

4. Impact of Legal Pronouncements: