The SVB refund process applies when an importer has paid customs duty on a provisional assessment while a Special Valuation Branch investigation was pending, and the finalised value turns out to be lower than the value provisionally assessed. Once the SVB issues its Investigation Report and the jurisdictional customs formation finalises the assessment, the excess duty becomes refundable. The claim is made under Section 27 of the Customs Act, 1962. Critically, a refund of Extra Duty Deposit follows a different path from a refund of duty, and the two should not be confused.
Understanding which route applies to your money is the difference between a refund sanctioned automatically and one contested on unjust enrichment.
During an SVB investigation, goods are cleared on provisional assessment under Section 18 of the Customs Act, 1962, so the consignment is not held up. Duty is paid on the provisionally assessed value. When the SVB completes its inquiry, it conveys its findings by way of an Investigation Report to the referring customs formation. Note that since Circular 05/2016, the SVB does not itself pass an appealable order. The customs station then re-assesses the Bills of Entry on the finalised value. If that value is lower than the provisional value, the excess duty paid becomes refundable.
A refund of excess duty is claimed under Section 27 of the Customs Act. The steps:
Many guides state the refund must be filed within one year of the final assessment. The statute is more precise. Under Section 27(1B)(c), where duty has been paid provisionally under Section 18, the one-year limitation is computed from the date of adjustment of duty after the final assessment, or in the case of re-assessment, from the date of that re-assessment. Courts have consistently held that the right to refund crystallises only on finalisation, so a claim filed after finalisation is not barred by reference to the original provisional payment date.
This distinction is the most valuable part of the SVB refund process and it is widely missed. Extra Duty Deposit is a security deposit taken to protect revenue while an investigation runs. It is not customs duty within the meaning of Section 2(15), and it is not levied under Section 12. Because EDD is not duty, Section 27 and its unjust enrichment bar do not apply to it. Tribunals have held that EDD should be refunded on finalisation of the provisional assessment without the importer even needing to file a refund application. If a customs formation applies the unjust enrichment test to your EDD, that position is contestable.
In practice, most importers post-2016 will have no EDD at all, since Circular 05/2016 removed it. EDD refunds typically concern legacy cases or the 5 per cent security imposed where documents were not furnished within 60 days.
Section 27(2) requires the claimant to show that the burden of duty was not passed on to another person. For refunds arising from finalisation of a provisional assessment, however, the position is contested. The Supreme Court in Allied Photographics India Ltd. and the tribunal in TVS Suzuki have taken the view that the doctrine of unjust enrichment does not apply to refunds consequent upon finalisation of provisional assessment. Where a refund is denied on this ground, the importer can support the claim with accounting treatment, pricing policy showing that duty was not separately recovered, and a Chartered Accountant’s certificate.
The Customs (Finalisation of Provisional Assessment) Regulations, 2025, notified by CBIC, make finalisation a time-bound exercise. Provisional assessments must now be finalised within two years, with a discretionary one-year extension by the Commissioner for recorded reasons. This matters for the SVB refund process because the refund right does not crystallise until finalisation. A time limit on finalisation therefore places an outer limit on how long an importer’s excess duty can remain locked up. On finalisation, the PD bond is also cancelled and the importer is discharged from its obligations.
At JPARKS INDIA, we manage the full SVB refund process for related-party importers. We track the Investigation Report through to re-assessment, compute the excess duty, prepare the Section 27 application with the supporting evidence and Chartered Accountant’s certificate, distinguish EDD security from duty so each is claimed on the correct footing, and pursue bond cancellation. Having served 500+ importers and exporters since 2018, we recover what is owed without avoidable delay. Learn more about our SVB registration services or book a free consultation.
The SVB refund process lets an importer reclaim excess customs duty paid on a provisional assessment once the SVB investigation concludes and the assessment is finalised at a lower value. The claim is made under Section 27 of the Customs Act, 1962.
Under Section 27(1B)(c), where duty was paid provisionally under Section 18, the one-year limitation runs from the date of adjustment of duty after final assessment, or from the date of re-assessment, not from the original provisional payment.
No. Extra Duty Deposit is a security deposit, not customs duty. Section 27 and its unjust enrichment bar do not apply to EDD, and tribunals have held EDD should be refunded on finalisation without a separate refund application.
Section 27(2) contains the unjust enrichment bar, but courts including the Supreme Court in Allied Photographics have held it does not apply to refunds arising from finalisation of a provisional assessment. A Chartered Accountant’s certificate helps support the claim.
No. Since Circular 05/2016, the SVB issues an Investigation Report to the referring customs formation. That formation finalises the provisional assessment, and the refund right arises on finalisation.
