CESTAT Allahabad allowed an importer’s refund with interest, holding that cash and a bank guarantee furnished under a High Court direction to release warehoused goods were deposits, not assessed duty.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, has held that amounts deposited under a High Court direction to secure release of goods, without any assessment by the proper officer, are not customs duty, so the time limit and conditions of Section 27(1A) of the Customs Act, 1962 do not bar their refund [Tin Manufacturing Co. of India v. Commissioner, Customs, Noida, 2026-juristway.com-3343-CESTAT(Allahabad)-Customs].

The appeal was decided by P.K. Choudhary, Member (Judicial), and K. Anpazhakan, Member (Technical); the order was written by Mr. Anpazhakan. The appellant imported tin sheets at Mumbai in 1987. Customs alleged misdeclaration and the goods were moved to a public bonded warehouse at Ghaziabad. The Collector decided the case in the importer’s favour by an order dated 25 Oct 1989, issued on 10 Jan 1990, but the Superintendent asked it to file an ex-bond bill of entry.

The importer challenged that letter in Writ Petition No. 580 of 1990 before the Allahabad High Court, which directed it to deposit ₹30 lakh in cash and furnish a bank guarantee of ₹13.15 lakh to release the goods. The writ was dismissed for want of prosecution on 7 Oct 2009. Rejecting a recall application on 2 Feb 2018, the High Court left the importer free to seek a refund as permitted by law.

The refund claim of ₹18,91,396 was rejected for want of documents under Section 27(1A). The Commissioner (Appeals) upheld this on 19 Sep 2022, treating the deposit as duty and the claim as filed almost 20 years late.

The Tribunal held that no assessment had been made when the payments were made, and observed that “‘Customs duty’ is not paid in the form of Bank Guarantee”. The amounts were only a deposit towards prospective liability, and the duty figure of ₹43,15,000 was an inference of the Commissioner (Appeals), not an assessment. It applied the Karnataka High Court in Commissioner of C.Ex., Bangalore v. KVR Construction (2012) and the Larger Bench view in Credible Engineering v. Commissioner of Customs and Central Excise, upheld by the Telangana High Court (Central Excise Appeal No. 03 of 2023), that an amount not payable as tax cannot be retained and limitation cannot be pressed against its refund.

The rejection was set aside and the appellant was held entitled to the refund with interest from the date of deposit until the date of refund.

2026-juristway.com-3343-CESTAT(Allahabad)-Customs