As per case facts, the Petitioner imported Shrimp Larvae Feed, paying a lower customs duty. An investigation by DRI concluded that the goods were misdeclared, and a higher duty was ...
2026:MHC:800WP No. 27739 of 2022
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IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 18-02-2026
Pronounced on: 25.02.2026
CORAM
THE HON'BLE MR JUSTICE ABDUL QUDDHOSE
WP No. 27739 of 2022
Virbac Animal Health India Pvt., Ltd.
rep. by its company Secretary and GM-Legal,
Jayesh Udeshi, 604, 6th Floor, Western Edge-1,
Megathane, Western Express Highway,
Borivali(E), Mumbai-400 066.
..Petitioner(s)
Vs
1.The Union of India
Rep. by its Secretary (Revenue) Department of
Revenue, Ministry of Finance, North Block,
New Delhi-110 001.
2.The Assistant Commissioner of Customs
(Refunds-II)
office of the commissioner of Customs,
Chennai-II, Customs House, 60 Rajaji Salai,
Chennai-600 001.
..Respondent(s)
Writ petition is filed under Article 226 of the Constitution of India
seeking for issuance of a writ of certiorarified mandamus to call for the records
relating to Order-in-Original No.91423/2022 dated 04.07.2022 passed by
respondent No.2 and quash the same as unconstitutional, arbitrary and against
the settled principles of law and subsequently direct the respondent No.2 to
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sanction refund of INR 3,01,01,534/- to the petitioner along with interest at the
rate of 18 percent per annum in the light of 1st respondents Notification
25/2019-Customs dated 06.07.2019.
For Petitioner(s):Mr.Prakash Shah, SC
for Mr.A.K.Rajaraman
For Respondent(s):Mr. K.Umesh Rao, SSC
ORDER
This writ petition has been filed challenging the impugned order dated
04.07.2022 passed by the second respondent rejecting the petitioner’s request
for refund of a sum of Rs.3,01,01,534/- paid by them towards differential
customs duty during DRI (Directorate of Revenue Intelligence) investigation
conducted pursuant to the reopening of the case by the Customs Department on
the ground that the petitioner had misdeclared the imported goods in the Bills of
Entry submitted by them.
2. The petitioner had paid the basic customs duty at the rate of 5%
Advalorem under Customs Tariff Heading 2309.09 for the import of Shrimp
Larvae Feed in pellet form during 2014 to 2017 under 11 Bills of Entry
submitted by them. The petitioner had also obtained clearance of the imported
goods from the Customs Department based on their declaration in the 11 Bills https://www.mhc.tn.gov.in/judis
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of Entry. Subsequently, DRI had investigated the matter on the ground that
Shrimp Larvae Feed imported by the petitioner was not in pellet form, and
therefore, the benefit of exemption granted to the petitioner from paying higher
customs duty at 30% Ad valorem was incorrect, and hence, the petitioner is
liable to pay the differential duty for the import of Shrimp Larvae Feed in non-
pellet form during 2014-2017 under 11 Bills of Entry.
3. According to the petitioner, based on the advise of DRI, it had
deposited a sum of Rs.3,16,91,824/- with the Customs Department, being the
differential customs duty payable by them. The petitioner claims that
eventhough on the advise of DRI they had deposited a sum of Rs.3,16,91,824/-
with the Customs Department, they were under the belief that they should seek
clarification in the notification relied upon by DRI for claiming differential
customs duty from them. Therefore, the petitioner claims that they had stated in
the letter dated 05.03.2019 that they desire to approach the related Ministry.
According to the petitioner, Vide Finance Bill, 2019, it was clarified that Prawn
Feed and Shrimp Larvae Feed, other than in pellet form, will also attract 5%
customs duty, as is the case with other Fish Feed in pellet form.
4. The claim of the petitioner for refund of the amount deposited was
rejected on 06.12.2019 on the ground that since the petitioner had admitted
wrong availment of concessional rate of duty, the question of refund does not https://www.mhc.tn.gov.in/judis
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arise. Aggrieved by the rejection order dated 06.12.2019, the petitioner had
earlier approached this Court by filing a writ petition. This Court, by its order
dated 24.11.2021 passed in W.P.No.14126 of 2020, remitted the case to the
second respondent with a direction to issue proper show cause notice within 60
days and proceed to pass orders on merits and in accordance with law
preferably within a period of 30 days after affording personal hearing to the
petitioner. According to the petitioner, in the said order, it was made clear that
the amount deposited by the petitioner during DRI investigation was treated to
be an amount paid by the petitioner under protest.
5. Pursuant to the directions issued by this Court on 24.11.2021 in the
earlier writ petition filed by the petitioner, the impugned order dated 04.07.2022
came to be passed by the second respondent rejecting the petitioner’s request for
refund of a sum of Rs.3,01,01,534/- deposited by them with the Customs
Department during DRI investigation. According to the petitioner, any amount
deposited by the petitioner during DRI investigation on the advise of DRI has to
be treated as a payment made under protest. The petitioner also claims that the
order dated 24.11.2021 passed in the earlier writ petition filed by them has also
treated the payment of Rs.3,16,91,824/- made by them during DRI investigation
as a payment made under protest. https://www.mhc.tn.gov.in/judis
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6. According to the petitioner, since it has been clarified vide the Finance
Bill, 2019, that Prawn Feed and Shrimp Larvae Feed, other than in pellet form,
will also attract 5% customs duty, the sum of Rs.3,16,91,824/- collected from
the petitioner during DRI investigation has to be refunded to the petitioner.
According to the petitioner, by total non-application of mind, the second
respondent, without taking note of the fact that under the Finance Bill, 2019, it
has been clarified that Prawn Feed and Shrimp Larvae Feed other than in pellet
form will also attract 5% customs duty, has passed the impugned order dated
04.07.2022 rejecting the petitioner’s request for refund of Rs.3,16,91,824/-.
7. The second respondent in the counter affidavit has raised the
preliminary objection as to the maintainability of the writ petition on the ground
of availability of alternative appellate remedy to the petitioner, if aggrieved by
the impugned order. According to the respondents, the basic customs duty for
import of Prawn Feed, Shrimp Larvae Feed and Fish Feed in non-pellet form is
30%. But, if Prawn Feed, Shrimp Larvae Feed and Fish Feed are imported in
pellet form, then the importers are entitled for an exemption under the basic
customs duty and the rate of duty to be paid is only 5% instead of 30%.
8. According to the respondents, the petitioner, by letter dated
05.03.2019, admitted to the stand taken by DRI and they paid the entire
differential duty along with applicable interest. According to the respondents, https://www.mhc.tn.gov.in/judis
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the petitioner, upon payment of basic customs duty, requested the respondents
to conclude the investigation. According to the respondents, based on their
request, DRI concluded the investigation under Section 28(2) of the Customs
Act, and the same was also communicated to the petitioner by a letter dated
03.07.2019. According to the respondents, the petitioner, taking advantage of
the fact that the investigation is closed, applied for refund before the same
second respondent, which has been rightly rejected under the impugned order.
According to the respondents, only based on the directions issued by this Court
in the earlier writ petition filed by the petitioner, the second respondent has
passed the impugned order by following the due procedure established under
law.
9. Heard Mr.Prakash Shah, learned Senior counsel, for
Mr.A.K.Rajaraman, learned counsel, appearing for the petitioner; and
Mr.K.Umesh Rao, learned Senior Standing counsel, appearing for the
respondents.
10. The learned Senior counsel appearing for the petitioner, after relying
upon the documents filed along with this writ petition, submitted as follows:-
(a) Since the petitioner had imported Shrimp Larvae Feed in pellet form
during 2014 to 2017 under 11 Bills of Entry, the petitioner was liable to pay the
basic customs duty only at the rate of 5% Advarloram under Customs Tariff https://www.mhc.tn.gov.in/judis
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Heading 2309.09.
(b) Vide the Finance Bill, 2019, it has been clarified that Prawn Feed and
Shrimp Larvae Feed other than pellet form will also attract 5% customs duty as
is the case with Fish Feed in pellet form.
(c) By total non-application of mind to the aforesaid Finance Bill, 2019,
the second respondent has passed the impugned order rejecting the petitioner’s
request for refund.
(d) Any amount deposited towards the differential customs duty during
DRI investigation is deemed to be a payment made by the petitioner under
protest.
(e) This Court, in its order dated 24.11.2021 passed in the earlier writ
petition filed by the petitioner, had also held that the amount paid by the
petitioner during the investigation has to be treated as an amount paid under
protest.
(f) Since the impugned order rejecting the petitioner’s request for refund
has been passed without following the binding precedents of this Court, there is
no bar for the petitioner to file this writ petition without exercising the statutory
alternative appellate remedy.
(g) Any recovery of the differential customs duty can be made by the
Customs Department only after issuing show cause notice as per the provisions
of Section 28 of the Customs Act, 1962. Time to issue show cause notice under
Section 28 of the Customs Act had also got expired in the case on hand. Since https://www.mhc.tn.gov.in/judis
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the sum of Rs.3,16,91,824/- was collected by the Customs Department without
issuing show cause notice under Section 28 of the Customs Act, the said sum
has to be refunded to the petitioner by the respondents.
11. The learned Senior counsel appearing for the petitioner, in support of
his contention that any payment made during DRI investigation is a payment
made under protest, has relied upon the following authorities:-
(a) Commissioner of C.Ex., Coimbatore Vs. Pricol Ltd. [2015 (320) ELT
703 (Mad.)]; and
(b) Commissioner of C.Ex., Lucknow Vs. Eveready Industries India Ltd.
[2017 (357) ELT 11(All.)].
(c) WPIL Ltd., Ghaziabad Vs. Commissioner of Central Excise, Meerut,
UP [MANU/SC/0122/2005]
12. According to the learned Senior counsel appearing for the petitioner,
even in the absence of the word ‘protest’ in the letter issued by the petitioner or
in the challan, the amount deposited by the petitioner during DRI investigation
ought to have been necessarily treated as a deposit made under protest. He
would further submit that under Article 265 of the Constitution of India, no
amount can be recovered in the guise of tax or duty without following the due
procedure established under law. https://www.mhc.tn.gov.in/judis
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13. On the other hand, the learned Senior Standing Counsel appearing for
the respondents would submit as follows:-
(a) The impugned order in original dated 04.07.2022 is an appealable
order under Section 128(1) of the Customs Act, 1962. Hence, this writ petition
is not maintainable.
(b) Since the directions issued by this Court dated 24.11.2021 in the
earlier writ petition filed by the very same petitioner have been duly followed
by the second respondent, the petitioner, if aggrieved by the impugned order,
has to necessarily file a statutory appeal, and cannot file a writ petition under
Article 226 of the Constitution of India.
(c) Being a speaking order with regard to the contentions raised by the
petitioner, the impugned order cannot be challenged through a writ petition.
(d) Since the petitioner through their letter dated 05.03.2019 addressed to
DRI had specifically sought for closure of investigation and had also paid the
differential customs duty along with interest, the petitioner is not entitled to
seek for refund, when the said amount was not made under protest, but, paid
voluntarily by the petitioner.
(e) The applicable rate of basic customs duty for import of Shrimp Larvae
Feed in non-pellet form is 30% and not 5%, and only due to the said reason,
pursuant to DRI investigation, the differential customs duty along with interest
was collected from the petitioner, who had also paid the same voluntarily.
(f) The petitioner’s claim, that the Finance Bill, 2019, clarified that the https://www.mhc.tn.gov.in/judis
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basic customs duty both for pellet form and non-pellet form is 5%, is incorrect.
The clarification relied upon by the petitioner in the Finance Bill, 2019, is not
found in the Finance Act, 2019. If the clarification is provided in the Finance
Act, 2019, then it would have the force of law. Therefore, the Finance Bill,
2019, cannot be relied upon by the petitioner for the purpose of establishing that
the basic customs duty for both the pellet form and non-pellet form is one and
the same.
(g) Even the Notification No.25/2019-Customs, dated 06.07.2019, only
states that it is an amendment notification, and therefore, it is clear that the 2019
notification is only an amendment and by way of an amendment, the basic
customs duty has been reduced to 5%. All amendments are only prospective in
nature. Since the subject goods were imported by the petitioner between 2014
and 2017, the amendment Notification, 2019, does not apply to the petitioner’s
case. When the payment of the differential customs duty was paid by the
petitioner voluntarily, and that the petitioner had also requested for closure of
DRI investigation, there is no necessity to issue show cause notice as
contemplated under Section 28 of the Customs Act, 1962.
(h) The judgments relied upon by the learned Senior counsel for the
petitioner are not applicable to the facts of the instant case, since, in all those
cases, the importer never asked for closure of investigation, and Notification
No.25/2019-Customs relied upon by the petitioner is only an amendment
notification, which is prospective in nature and is not a clarificatory notification https://www.mhc.tn.gov.in/judis
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as claimed by the petitioner.
DISCUSSION:
14. Based on the contentions of the respective parties, the following
issues arise for consideration in this writ petition:-
(a) Whether the differential customs duty collected from the
petitioner during DRI investigation was paid by the petitioner under
protest or not?
(b) Whether the notification relied upon by the petitioner to
establish that the petitioner had paid the correct customs duty at the
time of obtaining clearance of the goods is prospective or
retrospective?
(c) Whether the notification relied upon by the petitioner to
seek for refund of the differential customs duty is an amendment to
the earlier notification?
(d) Whether the collection of the differential customs duty
from the petitioner during the course of the investigation by DRI is
proper without issuance of any show cause notice under Section 28
of the Customs Act, 1962.
(e) Whether the petitioner is entitled to seek for refund of the
customs duty paid during the course of DRI investigation when the
petitioner through their letter had requested DRI to accept the https://www.mhc.tn.gov.in/judis
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differential customs duty and close the DRI investigation. Whether
the question of refund of the differential customs duty can be
agitated by the petitioner when the DRI through their letter dated
03.07.2019 to the petitioner has also confirmed the closure of DRI
investigation.
(f) Whether the refund of the customs duty is permissible
without the petitioner having not established that there will be no
unjust enrichment in their favour if the refund is granted.
15. To decide the above issues, this Court will have to first record
the undisputed facts. They are as follows:-
(a) Vide a letter dated 05.03.2019, the petitioner had intimated to
DRI that on the advise of DRI, they have paid the differential customs duty
of Rs.3,01,01,534/-, and in the same letter, they had requested DRI to
conclude the DRI proceedings.
(b) In the aforesaid letter, the petitioner never indicated to DRI that
the differential customs duty as demanded by DRI was paid by them under
protest.
(c) On receipt of the differential customs duty from the petitioner,
the DRI, vide a letter dated 03.07.2019, had accepted the request of the
petitioner, and they have concluded the DRI investigation under Section
28(2) of the Customs Act, 1962. https://www.mhc.tn.gov.in/judis
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(d) Between 05.03.2019, when the petitioner made a request to DRI
to close the investigation, and 03.07.2019, when DRI accepted the request
of the petitioner and closed the DRI investigation, the petitioner never
raised any dispute with regard to collection of differential customs duty
from them by the Customs Department.
(e) Only after the closure of DRI investigation, the petitioner has
agitated the issue for refund.
16. By relying upon the Finance Bill, 2019, and Notification
No.25/2019-Customs, dated 06.07.2019, issued by the Government of
India, Ministry of Finance, Department of Revenue, which stipulates that
the customs duty payable for Prawn Feed, Shrimp Larvae Feed and Fish
Feed in pellet form and non-pellet form is one and the same, the petitioner
had filed an application seeking for refund of the differential customs duty
paid by them to the Customs Department under Section 27 of the Customs
Act, 1962, on 20.09.2019. The said application was filed seeking to refund
a sum of Rs.3,01,01,534/- paid by them by way of differential customs
duty and interest during DRI investigation.
17. Under the impugned order, the second respondent has rejected
the petitioner’s request for refund on the following grounds:-
(a) The petitioner had paid the differential customs duty and interest https://www.mhc.tn.gov.in/judis
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voluntarily during the investigation by DRI.
(b) Vide their letter dated 05.03.2019, the petitioner had intimated to
DRI about the payment made by them towards the differential customs
duty and further requested DRI to conclude the DRI proceedings.
(c) DRI vide a letter dated 03.07.2019 had also intimated to the
petitioner that they had concluded the DRI investigation against the
petitioner on receipt of the differential customs duty from the petitioner
under Section 28(2) of the Customs Act, 1962.
(d) There was no protest made by the petitioner at the time when
they had deposited the differential customs duty to the Customs
Department during DRI investigation, and therefore, the petitioner had paid
the differential customs duty voluntarily.
(e) Refund cannot be sanctioned after the petitioner had paid the
differential customs duty together with interest voluntarily.
18. This Court has to now examine as to whether the reasons given
by the second respondent for rejecting the petitioner’s request for refund
are correct or not. At the outset, the principle of ‘estoppel by conduct’
comes into play. ‘Estoppel by conduct’ refers to the legal principle
preventing a party from acting inconsistently with their previous
representations or actions, provided those actions induced the other party to
rely on them to their detriment. This doctrine is frequently adopted in https://www.mhc.tn.gov.in/judis
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disputes involving valuation, classification and examination under the
Customs Act, 1962. In the case on hand, the petitioner having not raised
any protest for collection of the differential customs duty and interest from
the petitioner between 05.03.2019, when the petitioner had addressed a
letter to DRI to close DRI investigation upon payment of the differential
customs duty, and 03.07.2019, when DRI addressed a letter to the
petitioner accepting the request of the petitioner for closure of DRI
investigation, the question of the petitioner raising the issue of refund after
DRI accepted their request for closure of DRI investigation, does not arise,
as such a request is hit by the doctrine of “estoppel by conduct”.
19. The petitioner in this writ petition or in the earlier writ petition
filed by them never raised any issue with regard to the voluntary request
made by them through their letter dated 05.03.2019 to DRI for closure of
DRI investigation. All along both in the earlier writ petition as well as in
this writ petition, the petitioner has been raising the issue only with regard
to the payment made by them during DRI investigation, which, according
to them, was made only under protest. When the petitioner had not raised
any hue and cry in the earlier writ petition as well as in this writ petition,
with regard to the request made by them for closure of DRI investigation,
the question of considering/entertaining their request for refund of the
differential customs duty does not arise. If such a request is entertained, it https://www.mhc.tn.gov.in/judis
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will defeat the very purpose of DRI investigation and its sanctity will be
lost.
20. The Customs Act provides for two methods of refund; one is
refund of customs duty under Section 27 of the Customs Act, and the other
is refund of deposit (Ex. Extra Duty Deposit (EDD)). The refund of the
customs duty is governed by Section 27 of the Customs Act, while the
deposit refund stem from the provisional assessment under Section 18 of
the Customs Act. The limitation period for claiming customs duty refund
is one year from the date of payment, whereas EDD refund often has no
strict limitation period. For the customs duty refund, the importer must
prove that they did not pass the duty cost to buyers, i.e., they must prove
that they are not making any unjust enrichment by obtaining refund. This
doctrine is not applicable to EDD refund. The customs duty refund
requires a formal application, whereas EDD refund is generally processed
automatically. The customs duty is a tax, whereas EDD is a security
deposit (non-tax).
21. In the case on hand, admittedly, the petitioner had sought refund
of the differential customs duty and interest paid by them during DRI
investigation by filing an application under Section 27(1)(a) of the
Customs Act, on 20.09.2019. The said application was received by the https://www.mhc.tn.gov.in/judis
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Customs Department on 01.10.2019. The said application has also been
enclosed as a document along with this writ petition. Being an application
filed under Section 27 of the Act, necessarily, the petitioner will have to
satisfy that they have not made any unjust enrichment by passing the
excess customs duty paid by them to their buyers. Section 27 of the Act
makes it clear that any claim for refund of duty will have to be made with
substantial evidence to prove that the claimant had not made any unjust
enrichment. In the instant case, the petitioner has not placed on record any
supporting evidence to prove that the petitioner did not make any unjust
enrichment by passing on the excess customs duty collected by the
Customs Department to their buyers. Therefore, the petitioner has not
satisfied the requirement of Section 27 of the Customs Act to enable the
petitioner to seek for refund of the differential customs duty and interest
paid by them during DRI investigation.
22. Payment of customs duty made under protest allows tax payers to
challenge duty demand while avoiding penalties. Conversely, duty paid
voluntarily implies acceptance of liability making the future payment
difficult subject to strict statutory time limit. Payments under protest are
crucial for disputing coerced or incorrect assessment. “Under protest”
means that the importer disagrees with the duty assessment and explicitly
reserves their right to appeal. “Voluntary” payment signifies that the https://www.mhc.tn.gov.in/judis
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importer accepts tax liability and that there is no immediate intention to
dispute it. In the case on hand, neither in the letter dated 05.03.2019 sent
by the petitioner to DRI nor in the interregnum between 05.03.2019 and
03.07.2019, when the DRI had accepted the petitioner’s request for closure
of DRI investigation, the petitioner had raised any dispute with regard to
the differential duty and interest collected from the petitioner during DRI
investigation. Only as an afterthought, after DRI had accepted the request
of the petitioner, and had also closed the DRI investigation, which was also
communicated to the petitioner through the DRI’s letter dated 03.07.2019,
the petitioner, for the first time, had made an allegation that the payment
collected from the petitioner by DRI was a payment made under protest.
The conduct of the petitioner is clearly hit by the doctrine of “estoppel by
conduct”. Having made to believe that the petitioner will not raise any
dispute with regard to collection of the differential duty and interest, and
DRI having acted upon the request of the petitioner to close the DRI
investigation, the petitioner’s conduct in reopening the issue will amount to
giving a go-by to the sanctity of the DRI investigation and will also amount
to unjust enrichment if the application for refund is now entertained.
23. Notification No.25/2019-Customs, dated 06.07.2019, issued by
the Government of India, Ministry of Finance, Revenue Department, relied
upon by the learned Senior counsel for the petitioner, also makes it clear https://www.mhc.tn.gov.in/judis
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that it is only an amendment to the earlier notification dated 30.06.2017
issued through Notification No.50/2017-Customs. Therefore, since the
petitioner imported Shrimp Larvae Feed in pellet form between 2014 and
2017 under 11 Bills of Entry, the Notification dated 06.07.2019, being an
amendment, can only operate prospectively and not retrospectively.
Hence, the contention of the petitioner, that under the aforesaid
Notification dated 06.07.2019, it has been made clear that in both pellet
and non-pellet forms, customs duty at 5% is payable, and not 30%, has to
be rejected by this Court. Notification No.25/2019-Customs, dated
06.07.2019, is reproduced hereunder:-
TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXRAORDINARY,
PART II, SECTION 3, SUB-SECTION(i)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No. 25/2019- Customs
New Delhi, the 6th July, 2019
G.S.R.—(E).- In exercise of the powers conferred by sub-section (1) of
section 25 of the Customs Act, 1962 (52 of 1962) and sub-section (12) of
section 3 of Customs Tariff Act, 1975 (51 of 1975), the Central
Government, on being satisfied that it is necessary in the public interest so
to do, hereby makes the following further amendments-in-the-notification
of the Government of India, Ministry of Finance (Department of Revenue), https://www.mhc.tn.gov.in/judis
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No. 50/2017-Customs,-dated-the 30th June, 2017, published in the Gazette
of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R.
785(E), dated the 30th June, 2017, namely:-
In the said notification.
(1) in the Table, -
(1) S. No. 23 and the entries relating thereto shall be omitted;
(2) S. No. 24 and the entries relating thereto shall be omitted:
(3) against S.No.57, in column (3), in item I, sub-items (A), (B) and (C)
and the entries relating thereto shall be omitted;
(4) S. No. 67 and the entries relating thereto shall be omitted;
(5) against S. No. 119, in column (3), for the words "Prawn feed, shrimp
larvae feed and fish feed in pellet form", the following shall be substituted,
namely: "The following goods, namely: -
(1) Prawn feed;
(2) shrimp larvae feed;
(3) fish feed in pellet form";
(6) S. No. 125 and the entries relating thereto shall be omitted;
(7) ………………………..”
24. The Finance Act, 2019, also did not incorporate Sl.No.45 of
Finance Bill, 2019, which was relied upon by the learned Senior counsel
for the petitioner during the course of his arguments. Sl.No.45 of the
Finance Bill, 2019, read as follows:-
“45. 2309.. Clarification is being issued that prawn feed
and shrimp larvae feed, other than in pellet form will also
attract 5% customs duty applicable on other fish feed in
pellet form.” https://www.mhc.tn.gov.in/judis
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25. As could be seen from the Finance Act, 2019, which is binding,
and not the Finance Bill, the Finance Act, 2019, did not use the
terminology ‘clarification’, and it has used the term ‘amendment’, which
means any changes are only prospective and not retrospective.
26. In the earlier writ petition filed by the petitioner in
W.P.No.14126 of 2020, this Court, by its order dated 24.11.2021, while
remanding the matter back to the respondent for fresh consideration,
observed that the amount paid by the petitioner during DRI investigation
has to be treated as an amount paid under protest. The said observation
made in the earlier writ petition has no bearing for deciding the present writ
petition, in view of the fact that the matter has been remanded back to the
respondent for fresh consideration on merits and in accordance with law,
and therefore, any observation made by this Court in the earlier writ
petition cannot be utilised to the petitioner’s advantage. When the earlier
impugned order was quashed and remanded back to the very same
respondent for fresh consideration, placing reliance of certain observations
made by this Court in its order dated 24.11.2021 passed in W.P.No.14126
of 2020 filed by the very same petitioner, is of no avail. https://www.mhc.tn.gov.in/judis
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27. The decisions relied upon by the learned Senior counsel for the
petitioner have no applicability to the facts of the instant case for the
following reasons:-
(a) The decision in Pricol Ltd (cited supra) was dealing with a case
involving pre-deposit made under protest at the time of investigation, and
did not deal with the payment of differential customs duty and interest
made during DRI investigation. In the aforesaid decision, the assessee
cleared the imported goods without payment of duty. Therefore, the
assessee during DRI investigation under protest had deposited certain sums
of money for cooperating with the investigation, and on succeeding in the
said case, the assessee had sought for refund of the amount deposited.
Whereas the case on hand is distinguishable, since the petitioner herein
seeks for refund of the differential duty and interest, subsequent to the
closure of DRI investigation based on their request. As observed earlier by
this Court, there is a difference between refund of Extra Duty Deposit and
refund of the customs duty. In the aforesaid decision, this Court was
dealing with a case involving refund of Extra Duty Deposit and was not
dealing with the refund of the customs duty under Section 27 of the
Customs Act, 1962.
(b) The other decision, namely, Eveready Industries (cited supra),
relied upon by the learned Senior counsel for the petitioner, was also not
dealing with the refund of customs duty, but was dealing with the refund of https://www.mhc.tn.gov.in/judis
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pre-deposit amount. Only under those circumstances, it was held in the
aforesaid decision that the principle of unjust enrichment would not be
applicable. In the case on hand, admittedly, the petitioner had applied for
refund of the differential customs duty under Section 27 of the Customs
Act, 1962, which makes it clear that the principle of unjust enrichment is
applicable for such refund.
(c) The decision of the Hon’ble Supreme Court in WPIL Ltd.,
Ghaziabad Vs. Commissioner of Central Excise, Meerut, UP
[MANU/SC/0122/2005] is not applicable to the facts of the instant case.
When Notification No.25/2019-Customs, dated 06.07.2019, relied upon by
the learned Senior counsel for the petitioner has made it clear that the said
notification is only an amendment to the earlier notification, and being an
amendment, which has been made in public interest, the said amendment is
only prospective and not retrospective as claimed by the learned Senior
counsel for the petitioner. Therefore, the aforesaid decisions relied upon
by the learned Senior counsel for the petitioner do no enure to the benefit
of the petitioner.
28. Having made DRI to close the investigation, the petitioner cannot
now reopen the issue of refund, that too, when the petitioner either in this
writ petition or in the earlier writ petition had not explained as to why a
request was made to DRI to close the investigation. If such a refund https://www.mhc.tn.gov.in/judis
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application is entertained, Pandora’s box will be opened by permitting
unscrupulous claims of similar nature to flood statutory authorities and
Courts, resulting in no finality of any investigation.
29. For the foregoing reasons, the issues framed by this Court in the
opening of the discussion paragraph are answered as follows:-
(a) The differential customs duty collected from the petitioner during
DRI investigation was not paid under protest by the petitioner, but, was
paid voluntarily.
(b) The notification relied upon by the petitioner to establish that the
petitioner had paid correct customs duty at the time clearance of the goods,
is prospective and not retrospective.
(c) Notification No.25/2019-Customs, dated 06.07.2019, relied upon
by the petitioner is an amendment to the earlier notification, and it cannot
be treated as a substitution of the earlier notification, and hence, the
aforesaid Notification is only prospective and not retrospective.
(d) The collection of the differential customs duty from the petitioner
was made only based on the voluntary request of the petitioner to pay the
differential customs duty and interest, as demanded by DRI, and therefore,
there was no necessity for DRI to issue show cause notice under Section 28
of the Customs Act, 1962.
(e) Since the petitioner themselves requested for closure of DRI https://www.mhc.tn.gov.in/judis
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investigation upon payment of the differential customs duty, they are not
entitled to seek for refund as well as to re-agitate the issue once again.
(f) The petitioner has not placed on record any supporting evidence
to substantiate that the petitioner did not make any unjust enrichment by
passing on the excess customs duty collected by the Customs Department
to their buyers, and therefore, they are not entitled to seek refund.
30. In the result, there is no merit in the writ petition, and
accordingly, it is dismissed. No Costs. Connected writ miscellaneous
petitions, if any, stand closed.
25-02-2026
Neutral Citation: Yes
RKM
To
1.The Secretary (Revenue),
Department of Revenue, Ministry of Finance,
North Block, New Delhi-110 001.
2.The Assistant Commissioner of Customs
(Refunds-II)
office of the commissioner of Customs,
Chennai-II, Customs House, 60 Rajaji Salai,
Chennai-600 001. https://www.mhc.tn.gov.in/judis
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ABDUL QUDDHOSE, J.
RKM
WP No. 27739 of 2022
25-02-2026 https://www.mhc.tn.gov.in/judis
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