08 May 2014

Refund of ADD – Applicability of provisions of Customs Act

Delhi High Court has held that in the absence of Rules under Section 9AA(2)(i) of the Customs Tariff Act, 1975, limitation period of one year for making a refund application would be as indicated in Section 27(1B)(b) of the Customs Act, 1962, in the facts of the case. The court in Chandra Prabhu International Ltd. case hence allowed refund of anti-dumping duty, paid earlier under protest, when the refund had become due as a consequence of the Supreme Court’s order in the case of Relaxo Rubber where goods of same description were held as not liable to anti-dumping duty.

Interestingly, mechanism for refund as present under Section 27 of the Customs Act, was held as not applicable for refund of such anti-dumping since Section 9AA was held to be a complete code. It was noted that Section 9A(8) has extremely restricted application to provisions of the Customs Act, “so far as may be” in their application to the Customs Tariff Act and that Section 27 is to be incorporated as regards refund claims only as far as is not covered by Sections 9A and 9AA. Department’s contention that assessment of ADD should have been challenged was hence rejected by the court affirming the orders of Commissioner (Appeals) and the Tribunal, granting refund. The order impugned had held that provisions of Section 9A(2)(b) of Customs Tariff Act, 1975 and not that of Section 27 of Customs Act, 1962 are applicable in present case and that payment of duty under protest indicated that the levy was contested. The court in this decision dated on 10-3-2014 noted that Section 3 of the Customs Tariff Act never envisioned duty of the kind imposed under Section 9A. Anti-dumping duty was further held as not a duty of Customs because unlike incidence of Customs duty, which occurs immediately upon the importation of goods, imposition of duty in case of anti-dumping duty is dependent upon existence of certain determined circumstances.


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