Legal principle

Refund under Section 26A(1) is confined to goods cleared on payment of duty for home consumption, so where imported goods were never cleared for home consumption but were re-exported, the offence proviso does not bar refund, and Section 26A(3) cannot be invoked absent evidence that the goods were perishable or had exceeded their shelf life.

Court decision

The Tribunal (R.K. Singh, Member (Technical)) dismissed the Revenue's appeal, thereby upholding the Order-in-Appeal allowing the refund of Rs.13,36,540/- to the importer.

Facts

M/s. Haldiram Manufacturing Co. Pvt. Ltd. imported red chilli chatka seasoning and magic masala seasoning (for captive consumption), filed a Bill of Entry and paid duty before clearance under second check procedure. Clearance required a No Objection Certificate from FSSAI, which expressed inability to issue it because the individual packs lacked labelling of contents. The importer was permitted to re-export the goods on payment of redemption fine and penalty, did so, and claimed refund of the duty of Rs.13,36,540/-. The primary adjudicating authority rejected the refund under proviso 3 to Section 26A of the Customs Act, 1962 on the ground that an offence had been committed at the time of import, but Commissioner (Appeals) set aside that order and allowed the refund, and Revenue appealed to the Tribunal.

Key provisions

• Section 26A(3), Customs Act, 1962 — Refund of import duty in certain cases
• Section 26(1), Customs Act, 1962 — Refund of export duty in certain cases