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Appearance:

Mr. Raghavendra, Advocate For the Appellant Mr. Parashiva Murthy, A.R. For the Respondent Date of Hearing: 16/09/2016 Date of Decision: 20/09/2016 CORAM :
HON'BLE SHRI S. S. GARG, JUDICIAL MEMBER The present appeal is directed against the Order-in-Appeal No. 423/2013 CUS (B) dated 13.11.2015, passed by the Commissioner (Appeals) vide which he has upheld the Order-in-Original and rejected the appeal of the appellant.

2. Briefly, the facts of the present case is that the appellant was importing Mechanical seals from their related company, M/s S.K.F. Sweden and their associates companies. Since the appellant is deemed to be related to their foreign suppliers, the Department referred the matter to SVB Mumbai for investigation. The appellant was paying 1% EDD (Extra Duty Deposit) for their imports and the Bills of Entry were provisionally assessed. The Assistant Commissioner, Air Cargo complex, Bangalore finalized the Bills of Entry vide order dated 21.3.2012 and based on this order, the appellant filed a refund claim dated 7.7.2012. The Department directed the appellant to furnish the documents and their books of accounts. The appellant filed the reply vide their letter dated 10.10.2012. The Assistant Commissioner rejected the refund claim on the ground of unjust enrichment. Aggrieved by the same, the appellant filed appeal before the Commissioner (Appeals) and the learned Commissioner (Appeals) vide impugned order rejected the appeal and upheld the impugned order passed by the lower authority. Aggrieved by the same, the appellant is before this Tribunal.

3. Heard both the parties and perused the records.

4. The learned counsel for the appellant submitted that EDD was paid in terms of the Boards Circular Nos. 1/98 Cus dated 1.1.98 and 11/2001-Cus dated 23.2.2001 as security deposit during the pendency of the investigation by SVB and hence, the same is in the nature of security deposit with the Department. He further submitted that the provisions of Section 27 of Customs Act, 1962 are not applicable in the refund of security deposit. He also submitted that EDD was paid on pending investigation by SVB and hence, the refund has to be sanctioned automatically on finalization of provisional assessment by SVB without even an application for refund. He also submitted that EDD is not duty of Customs as per Section 2(15) of the Customs Act, 1962 and is not charged / collected as per Section 12 of the Customs Act, 1962 and the Customs Tariff Act, 1975. He also submitted that once it is proved that EDD is in the nature of security deposit with the Department then the principles of unjust enrichment is not applicable for refund of the same. In support of this submission, he relied upon the following decisions :