The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has ruled that the limitation period under Section 27 of the Customs Act, 1962, does not apply to refund claims for Extra Duty Deposit (EDD) collected during Special Valuation Branch (SVB) investigations.
The bench of Anil G. Shakkarwar (Technical Member) examined the nature of the EDD and relied on Circular No. 5/2016-Cus. dated February 9, 2016, issued by the Central Board of Excise and Customs (CBEC), which classified the EDD as a “security deposit” collected during provisional assessments by the SVB.
The case stemmed from 20 Bills of Entry filed by the importer between February 2015 and September 2015. After the goods were finally assessed and cleared for home consumption, the Revenue, on October 7, 2015, directed the importer to deposit ₹6,81,839, equivalent to 1% of the assessable value, as an EDD to facilitate SVB investigations.
The SVB concluded its investigation on July 11, 2016, and confirmed that the declared transaction values were correct. It was held that no additional customs duty was payable by the importer. With the investigation completed and no further duty liability, the importer filed a refund application for the EDD on September 30, 2019.
However, the original adjudicating authority rejected the claim on March 5, 2021, citing that the application was barred by the one-year limitation period prescribed under Section 27 of the Customs Act. This decision was upheld by the Commissioner (Appeals) through an order dated September 29, 2022, who further held that there was no provision in the Customs Act to refund such amounts.
The tribunal relied on the Delhi High Court’s decision in Sentec India Company Pvt. Ltd. vs. Assistant Commissioner of Customs (2025), which clarified that EDD is not customs duty and thus refund claims for such deposits are not subject to the statutory time limit under Section 27.
CESTAT set aside the order of the Commissioner (Appeals) and directed the Revenue to refund the EDD amount of Rs. 6,81,839 to the importer within one month of the order, along with applicable interest.
Case Details
Case Title: Gorakhram Haribux Versus Commissioner of Customs (Import)
Case No.: Customs Appeal No. 85031 of 2023
Date: 25.07.2025
Counsel For Petitioner: Ramnath Prabhu
Counsel For Respondent: L.B. D’Coasta
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