Refund of Extra Duty Deposit(EDD)
It is stated that the provision of section 27 of the Customs Act 1962, including unjust enrichment are not attracted to refund deposit made pending investigation by the SVB.
The following points are submitted to this effect:
The EDD is not duty of Customs as per section 2(15) of the Customs Act,1962.
The EDD is not charged as per section 12 of the Customs Act,1962 and the Customs Tariff Act,1975.
The EDD is not paid as per Customs(Provisional Duty Assessment)Regulation,1963.
The EDD is a deposit. It is charged as per para 9 of the Board`s Circular No. 11/2001-Cus., dated 23-2-2001. The said para is reproduced for reference :
''9. The amount of extra duty deposit presently kept at 1% will be continued. Board has however decided that if the importer does not furnish complete reply to the questionnaire within 30 days, of receipt of the ‘Questionnaire’ by the importer, the extra duty deposit will be increased to 5% till the date of receipt of reply by the Department. It should therefore be impressed upon the concerned importers (in the public notice that is issued) to ensure timely replies being sent to the Questionnaire to avoid any higher deposit being insisted''.
It is clear from the above para that EDD is charged initially 1% of the value of the goods,if importer does not submit `Questionnaire` within 30 days,then,the EDD may be increased to 5% .Therefore, the EDD is not charged as per Customs Tariff Act and section 12 of the Customs Act ,1962.
The relevant date for determining the rate of duty on the imported goods are governed by the section 15 of the Customs Act,1962.It may be date of presentation of the B/E under section 46 or section 68,or,on the date of payment of duty,as the case may be. Where as ,in case of EDD,if the importer fails to submit in stipulated time then it may be increased from 1% to 5% by the AC/DC(SVB). But no adjudication authority can increase rate of duty on any
goods for non submission of any documents(i.e Questionnaire) in stipulated time. Thus, the increase in rate of EDD is not governed by section 15 of the Customs Act,1962,as EDD is not a duty.
The payment of Extra Duty Deposit (EDD) is shown separately in the challan.
The EDD is charged as 1% or 5 % of the value of the goods as per SVB circular,irrespective of classification and rate of duty applicable on the goods . Where as ,duty is determined based on classification and rate of duty applicable ,in addition to value of the imported goods. Therefore ,the EDD and duty are not the same.
The honourable Tribunal in following cases have held that the EDD is not a duty and provision of section 27 of the Customs Act,1962 are not attracted for refunding of the same.
i) 2007 (208) E.L.T. 439 (Tri. - Chennai) COMMISSIONER CUSTOMS,
CHENNAI Versus SAYONARA EXPORTS PVT. LTD
ii) 2007 (213) E.L.T. 281 (Tri. - Bang.) COMMISSIONER OF
CUSTOMS, BANGALORE Versus ECOMASTER (INDIA) PVT. LTD
The EDD is similar to payment made for fine,penalty and bank guarantee on imported goods. The provision of section 27 are not attracted for refunding these payment.
Provision of subsection 2(a) and 5(a) of section 18 of the Customs Act,1962 are not attracted for refund of EDD
The provision are attracted for duty and not for deposit. The assessment of duty includes valuation,classification and determination of rate of duty of the imported goods. In the present case, there is no change in valuation, classification and rate of duty at the time of SVB finalisation by the Groups. Therefore, there is no change in provisionally duty assessed and duty finally assessed on the imported goods. No adjustment of duty as per sub section 2(a) of the section 18 of the Customs Act. Hence, no refund of duty. Provision of subsection 5(a) of section 18 of the Customs Act are also not attracted,if there is no refund of duty.
Therefore,keeping in view of above cited facts and law,the EDD may be refunded without seeking documents for Unjust enrichment.