Case Details: Sentec India Company Pvt. ltd. Versus Assistant Commissioner of Customs (2025) 30 Centax 506 (Del.)
Judiciary and Counsel Details
- Prathiba M. Singh & Dharmesh Sharma, JJ.
- S/Shri Abhishek Garg, Yash Gaiha, Ranesh Singh Mankotia & Naman Mehta, Advs., for the Petitioner.
- S/Shri Atul Tripathi, SSC with Shubham Mishra, Adv., for the Respondent.
Facts of the Case
The petitioner-importer had imported goods between 2014 and 2017, which were cleared on provisional assessments. Despite the clarification issued under Circular No. 5/2016-Cus., dated 09-02-2016 by the Central Board of Excise and Customs (CBEC), stating that any payment collected post-provisional assessment for release of goods would constitute a ‘security deposit’, the petitioner was required to deposit Extra Duty Deposit (EDD) at various intervals. This was demanded by Customs authorities as a safeguard against alleged under-declaration of value.
Following the completion of final assessments, the declared value submitted by the petitioner was accepted, and the goods were assessed accordingly without any enhancement. The petitioner filed a refund application for the EDD amounts deposited. The claim was rejected by the Department solely on the ground that it was filed beyond the one-year limitation period prescribed under Section 27 of the Customs Act, 1962. The petitioner approached the Delhi High Court seeking relief against the rejection.
High Court Held
The Delhi High Court held that EDD collected by Customs authorities did not constitute Customs duty within the meaning of Section 27 of the Customs Act, 1962. It was observed that EDD was collected as a form of security to cover any potential liability arising from under-declaration, and once the declared value was accepted during final assessment, the very basis for retaining EDD ceased to exist. The Court noted that the Department’s reliance on the limitation period under Section 27 was misplaced, as that provision governs refund of duty, not deposits made as security.
It further observed that Circular No. 5/2016-Cus., dated 09-02-2016 had already clarified the legal character of such payments. The request of the Department to relegate the petitioner to the appellate forum was found to be without merit. Accordingly, the petition was allowed, and the refund of EDD was directed without applying the bar of limitation.
List of Cases Cited
- Assistant Commissioner v. Dalmia Cement (Bharat) Ltd. — W.A. No. 1084 of 2021 by Madras High Court — Referred [Para 10]
- China Steel Corporation India Pvt. Ltd. v. Commissioner — 2022 SCC Online CESTAT 2745 CESTAT Ahmedabad — Referred [Para 10]
- Commissioner v. Hitachi Koki India Pvt. Ltd. — 2012 (281) E.L.T. 207 (Kar.) — Relied on [Para 17]
- Nithin India Tech Ltd. v. Deputy Commissioner — W.P. No. 24813 of 2020 by Madras High Court — Relied on [Paras 10, 16]
- Sentec India Company Pvt. Ltd. v. Assistant Commissioner —2023 SCC Online Del 701 — Relied on [Paras 9, 18]
List of Departmental Clarification Cited
- C.B.E. & C. Circular No. 1/98-Cus., dated 1-1-1998 [Para 4]
- C.B.E. & C. Circular No. 11/2001-Cus., dated 23-2-2001 [Para 4]
- C.B.E. & C. Circular No. 5/2016-Cus., dated 9-2-2016 [Paras 4, 8, 14]
