Provision of Time Limit, Unjust enrichment applicable on Refund of Deposit made on Provisional Assessment as Security to bond executed under Customs Act, 1962: CESTAT [Read Order]

The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that provision of time limit, unjust enrichment applicable on Refund of deposit made on provisional assessment as security to bond executed under Customs Act, 1962.

The appellant, Nirma Ltd. imported a consignment of 51,723 MT Indonesian Coal and filed Bill of Entry No.08/10- 11 dated 03.02.2011 with Customs at Bhavnagar and the same was assessed provisionally only for want of original documents and test results. The Bill of Entry shows endorsement dated 03.02.2011 by officers. Provisional duty of Rs.81,97,292/- estimated was paid as per Bill of Entry No.08/10-11 dated 03.02.2011 which was finally assessed on the same estimated duty on 11.10.2011. Vide letter dated 03.02.2011, the appellant claimed benefit of preferential rate of Customs (Basic Duty) duty at the rate of 3% ADV under Notification No.153/2009 Customs dated 31.12.2009 as amended. As desired by the proper officer while provisional assessment, appellant has deposited Rs.16,39,458/- under protest with a bank guarantee and also a bond of Rs.20,49,580 as ordered by the Assistant Commissioner for allowing provisional assessment of said Bill of Entry filed by the appellant.

The appellant submitted that the amount of Rs.16,39,458/- was deposited as security deposit with the bond and bank guarantee therefore, the same was not duty estimated as part of provisional duty. The proper Officer should have released this amount in the same manner as was released the bond and bank guarantee. The security deposit is not different from the bank guarantee because both are in the nature of security deposit therefore, the refund of the same is not governed by Section 27 of Customs Act, 1962.

The coram of Judicial Member, Ramesh Nair held that under the Head of Account it is a customs duty which was paid under account heading No.0037 and also in the description column it is clearly mentioned that the deposit of amount is equal to 20% of provisional duty therefore, the amount of Rs.16,39,458/- has been paid as customs duty only therefore it is not a deposit as has been claimed by the appellant but it is a custom duty. Since in view of the above documentary evidence, it is established that the amount for which refund was sought for by the appellant is not a deposit but it is a duty. Therefore, the refund is clearly governed by Section 27 of the Customs Act, 1962 therefore, all the provision of limitation and unjust enrichment, etc is clearly applicable.

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