Delhi HC: Refund Cannot Be Re-Credited to Licence After Scheme Abolition:

High Court rules provision for doubtful debts not a reserve or liability; additions under Section 115JA unjustified; relief granted for AY 1997–98.

Refund Ordered, Re-credit Abolished

Meetu Kumari

Aug 4, 2025

Last update on Aug 4, 2025

Delhi HC: Refund Cannot Be Re-Credited to Licence After Scheme Abolition

The petitioner in this case imported 197 consignments of Aluminium scrap from various countries and had filed for the clearance of these before the AO. The Assessing Officer disallowed the declared transaction amount and levied excess customs duty.

CIT (A)'s Ruling: Aggrieved, the assessee filed an appeal before the CIT (A). In appeal, the Principal Commissioner (Appeals) allowed the original assessments of the petitioner and directed the refund order amounting to Rs. 8.75 crore. Rs. 8.60 crore was refunded by RTGS, but Rs. 15,00,093 was re-credited to the license of the petitioner.

The petitioner has protested against this re‑credit. The appeal to the Commissioner (Appeals) was also dismissed on 17/06/2021 as time‑barred, with a 559 day gap. CESTAT also rejected the second appeal on the same ground. The petitioner argued before the High Court that the re‑crediting scheme had been abolished in 2013, the direction of the Commissioner being illegal. Issue Raised: Can the Customs Department refund the charges for a license under a program that was suspended in 2013, despite the petitioner’s delayed appeals? HC's Ruling: The High Court ruled that a retention of Rs. 15,00,093 was not permitted since the scheme already stood closed by a public notice in 2013. The Court observed that it was not right to retain money under an existing scheme that no longer existed and would not be legal. The Bench observed that the fault lay with the petitioner for filing the belated appeals but observed that it did not necessarily follow that it was equitable that the Department retain the money illegally. The Court ordered the Customs Department to refund the money within three months, along with simple interest at 4% per annum (rather than the normal 6%), considering the petitioner's delay. The writ petition was thus disposed of. To Read Full Order, Download PDF Given Below

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Meetu Kumari

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