Refund of Special Additional Customs Duty – another view
A concerned Netizen, wrote in;
Happy to read your timely comments in your on the issue of the refund of the Special Additional Customs Duty of 4%.
I have the following comments to offer which is the result of my interactions with experts. You may share this for the benefit of the netizens.
To begin with, the theory of 'Unjust Enrichment' cannot be made applicable to the refund under notification no. 102/07- CUS , for the simple and foremost reason, that it is not a 'refund' in its statutory sense, but an 'exemption' granted vide a notification issued under Section 25 of the Customs Act. The so called refund is only instrumental, a modus operandi to give effect to the 'exemption'. What come under the mischief of 'unjust enrichment' are only those refunds that are sanctionable under Section 27 of the act and NOT the ones which are designed to give effect to an exemption. In other words, the mechanism of refund has been adopted only to operationalize the exemption envisaged under notification no. 102/07. So along as the conditions of the parent notification are satisfied, the refund needs to be sanctioned.
In the past too, similar notifications granting exemptions in the form of refunds has been issued in respect of area based exemptions like Jammu & Kashmir. There are notifications no. 56/2002-CE and 57/2007-CE.
The CBEC had then clarified vide its circular 842/19/2006- CX dated 8/12/2006 that the provisions of Section 11 B of the Central Excise Act will not be applicable to the above notifications for the reasons discussed above. The clarifications given by the CBEC are equally applicable to the notification no 102/07, because Section 27 of the Customs Act is pari materia with Section 11 B of the Central Excise Act.
Basically designed to give effect to exemption, the doctrine of 'Unjust Enrichment' cannot be extended to the refunds under notification no. 102/07.
On the above lines, the limitation of 6 months (one year provided by the Board's circular) is also not applicable to refunds designed to give effect to exemptions.
As rightly opined by you, the circular far overrides the scope of the notification, in as much as, the restrictions and paper work makes the notification a nullity. But then that is what our Board always wanted.
Regards,
Krishnan
Thank You Krishnan, for your very right comments. Let us hope the Board listens!