on import of mobile sets during 2014. The refund sought is to the tune of around Rs 50 crore.
A division bench headed by Justice S Muralidhar sought response from the ministry of finance and the customs department after Micromax challenged the order of assistant commissioner of customs that rejected its claim for refund of the excess additional duty of customs paid under Section 3(1) of the Customs Tariff Act at the time of import of mobile handsets between July 30, 2014, and October 29, 2014.
Stating that no such Cenvat credit has been taken by Micromax on the inputs or capital goods, counsel Tarun Gulati argued that the company was entitled to refund of the additional duty of customs paid in excess of 1% of the value of the imported goods.
While Micromax had originally paid the additional duty of Customs at the rate of 6% of the value of the imported goods, which is equivalent to the rate of excise duty on the manufacture of mobile handsets in India, the applicable rate during the relevant period, however, was 1% subject to the condition that no Cenvat credit was taken on the inputs or capital goods used in the manufacture of the final products.
Citing the Supreme Court’s judgment in the case of SRF Ltd vs Commissioner of Customs, Micromax said that an importer is eligible to claim such exemption when no such Cenvat credit has been availed by the importer during the corresponding period. The SC had further held that for quantification of additional Customs duty, it has to be imagined that the imported article had been manufactured in India and the prevalent rate of excise duty shall be applicable.
Gulati contended that the refunds were rejected in defiance of the law laid down by the Supreme Court.