IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 19.06.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Civil Miscellaneous Appeal No.1535 of 2008 Commissioner of Customs (Export), Customs House, Chennai 1 Appellant v. 1. M/s. Cable Corporation of India Ltd., Temple Tower, Wing No.1, 4th Floor, 672 Anna Salai, Chennai 35. 2. Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Shastri Bhawan Annexe, I Floor, 26 Haddows Road, Chennai 6. Respondents Civil Miscellaneous Appeal filed under section 130 of the Customs Act, 1962 against the Final Order No.952 of 2006 dated 11.10.2006 in the file of the CESTAT, Chennai. For appellant : Mr.T.Chandrasekaran JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) The Commissioner of Customs (Export) Chennai has come to this Court by way of appeal against the final order passed by the CESTAT in Final Order No.952 of 2006 dated 11.10.2006 by formulating the following questions of law : 1. Whether the Tribunal is right in not considering the legal issue that there cannot be an order of refund import application and that application should be within the time stipulated in the statute? 2. Whether the Tribunal is right in not considering as to whether the time limit is applicable to the refund of security deposit or not and if it is to be refunded, under what provision of law? https://hcservices.ecourts.gov.in/hcservices/ 2. The material facts required for disposal of the appeal are as follows : The respondent M/s Cable Corporation of India filed a refund application on 13.01.2005 for refund of excess amount, in a sum of Rs.1,22,914/- which was paid by them as cash security deposit for the purpose of importing goods under Project Import Regulations. The Bills of Entry filed by the importer-respondent was finally assessed on 22.06.2004 and was recommended for refund. That application has been rejected by the Deputy Commissioner of Customs (Refund) on the premise that as per Explanation II to section 27 of the Customs Act, 1962, 'where any duty is paid provisionally under section 18, the limitation of one year or six months, as the case may be, shall be computed from the date of adjustment of duty after final assessment thereof. In this case, the bill of entry has been finalised and cancellation of bond were done on 22.06.2004 whereas the refund application was filed on 13.01.2005. Thus, it is beyond the period of six months, as prescribed under section 27 of the Customs Act. As such the claim is barred by the provisions of Section 27 of the Customs Act. 3. On appeal, at the instance of the importer, the Commissioner of Customs (Appeals) set aside the order-in-original and allowed the claim of refund by its order dated 31.10.2005 by holding that what was sought for refund was only security deposit, which per se is not duty and thereby the provisions of section 27 of the Customs Act, 1962, is not applicable in this case. The department filed an appeal before the CESTAT only to have an order of confirmation of the order of the Commissioner of Customs, (Appeals). Having aggrieved by the order, the present appeal is filed by formulating the questions of law above referred to. 4. The issues involved in the present case are squarely covered by the decision in the case of Commissioner of Customs, Chennai v. Aristo Spinners Ltd., (2008) 4 TLNJ 517 decided by a Division Bench of this Court in which one of us (KRPJ) is a party, relying on the judgment of the Division Bench in which both of us are parties in the case of Commissioner of Customs (Exports) v. M/s. Jraj Exports (P) Ltd., 2007 (3) TLNJ 532, wherein we have held that the bank guarantee cannot be regarded as equivalent to payment of duty and it is only furnished to safeguard the interest of the revenue in case of non fulfilment of export obligation. 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. In the decision in the case of Jraj Exports (P) Ltd., referred to supra, this Court has taken in aid the judgment of the apex Court in the case of Oswal Agro Mills Ltd. v. Assistant Collector of Central Excise, 1994(2) SCC 546. https://hcservices.ecourts.gov.in/hcservices/ 5. Further, in this case, the CESTAT, after referring to section 18 of the Act, which provides for provisional clearance, and having regard to the enunciation of law laid down by the Supreme Court in the case of Mafatlal Industries Limited v. Union of India, (1997) 89 ELT 247 with reference to Rule 9B held that the provision relating to the refund of excess of the amount collected does not apply to sections 18 and 27 of the Customs Act. To the same effect is the Bombay High Court's decision in the case of Bussa Overseas and Properties Pvt. Ltd. 2003 (158) ELT 135 which has clarified the Supreme Court's decision. 6. In the above stated circumstances of the case, we are of the view that the questions of law formulated for entertaining the appeal are already covered by the decisions referred to above against the department. The appeal is dismissed. However, there will be no order as to costs. sd/- Asst.Registrar /true copy/ Sub Asst.Registrar mf To 1. Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Shastri Bhawan Annexe, I Floor, 26 Haddows Road, Chennai 6. 2. The Commissioner of Customs (Export), Customs House, Chennai 1 +1 cc To Mr.T.Chandrasekaran , Advocate, SR.30972 CMA No.1535 of 2008 ssv [co] gkg/9.7 https://hcservices.ecourts.gov.in/hcservices/