Order Date – 15 September 2023

Parties: AJ Gold and Silver Refinery Vs Assistant Commissioner of Customs (Drawback) &Ors.

Facts –

• The Petitioner, AJ Gold and Silver Refinery, is a precious metal refining firm and in connection with which it imports gold dore bars. 
• The petitioner submitted relevant documents for disbursal of drawback claims. It was admitted by them that gold dore bars had been imported free of BCD, but they had paid additional duty as mandated in terms of Section 3 of the Tariff Act, which would be akin to a customs duty.
• The Respondent rejected the claim of duty drawback on the ground that the import of gold dore bars had been undertaken without payment of BCD. It was further asserted by the respondents that the petitioner had also contravened Condition No. 23 of Notification No. 98/2013 dated 14 September 2013.

Issue –

• Whether the payment of additional duty is sufficient to claim duty drawback?

Order –

• The Divisional Bench of Hon’ble High Court observed that the mere fact that the said additional duty is equated to a duty of excise which is leviable does not essentially change the character of that duty as being one other than that which is imposed on import of articles into India.
• It would also clearly flow from the pertinent observations rendered by the Supreme Court in Hyderabad Industries where their Lordships significantly observed that while Section 3 of the Tariff Act may constitute a charging section distinct and separate from Section 12 of the Customs Act, it continues to remain in the genre of a customs duty.
• Once the petitioner had paid the duties as contemplated under Section 3 of the Tariff Act, it could not be possibly contended that the goods were imported “duty free”. Undisputedly, the free shipping bills were duly amended on 27 February 2015 whereafter the petitioner applied for release of drawback benefits on 06 May 2015.
• In terms of Section 75A of the Customs Act, the respondents are also liable to pay interest which would commence upon the expiry of the period of one month from 06 May 2015 and would run till such time as the amount is ultimately paid. Thus, the respondents are hereby commanded to attend to the claim of the petitioner for disbursement of drawback benefits as claimed and release the same with due expedition.