Custom, Excise & Service Tax Tribunal
Rfb Rig Corporation Llc vs Commissioner Of Customs (Aircargo ... on 3 July, 2017
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C/40277/2016
[Arising out of Order-in-Appeal No.638/2015 dt. 30.09.2015 passed by the Commissioner of Customs (Appeals-I), Chennai]
RFB Rig Corporation LLC
Appellant
Versus
Commissioner of Customs (Aircargo Complex),
Chennai Respondent
Appearance:
Shri J.C. Patel, Advocate For the Appellant Shri B. Balamurugan, AC (AR) For the Respondent CORAM:
Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of hearing : 28.06.2017 Date of Pronouncement : 03.07.2017 FINAL ORDER No. 41108 / 2017 The appellant herein had imported consignments containing equipments, spares and consumables vide 28 Bills of Entry. In the absence of Essentiality Certificates issued by the Director General of Hydrocarbons (DGH), they were unable to avail duty exemption under Customs Notification No.21/2002-Cus. dt. 1.3.2002. Consequent to ONGC declining issue of recommendatory letter, appellant approached the Hon'ble High Court of Delhi in C.W.No.4180/2002 who vide interim order dt. 30.07.2002 inter alia ordered that "..in case the petitioners are willing to get their consignment of spare parts released, they may do so by paying the customs duty as demanded, of course under protest and subject to orders in this petition..". In pursuance to High Court's order, ONGC issued recommendatory letters and accordingly, DGH also issued Essentiality Certificates to the appellant. Vide Final Order dt. 11.3.2003, the Hon'ble High Court of Delhi disposed of the writ petition filed by the appellant inter alia directing the Customs authorities to consider and dispose the refund claims by taking into consideration the Essentiality Certificates issued to the petitioners. Consequently, importers filed refund claims against the payment of duty already paid during the clearance of the impugned imported goods in respect of the 28 Bills of Entry. However, vide order dt.23.12.2005, the Deputy Commissioner of Customs rejected 23 (twenty three) refund claims on the ground of limitation. By an order dt. 28.2.2006 another 5 (five) refund claims were rejected on the same ground. These orders were maintained by the Commissioner (Appeals). Aggrieved, the appellants had approached the CESTAT Chennai, who, by Final Order No.40528-40529/2014 dt. 23.06.2014 in Appeal Nos.C/282/2006 & C/288/2006, remanded the matter back to the adjudicating authority with direction to decide afresh after considering the submissions of the appellant and in the light of the orders of Hon'ble Delhi High Court and Hon'ble Supreme Court. In the novo proceedings, the lower authority vide an order dt. 04.06.2015 has sanctioned refunds in respect of 15 (fifteen) out of the 28 Bills of Entry, however, disallowed refunds in respect of the remaining 13 claims (thirteen) on the ground of limitation. On appeal, Commissioner (Appeals) vide impugned order dt. 30.09.2015, upheld the findings of lower authority and rejected the appeal. Aggrieved, the appellants are once again before this forum.
2.1 Today when the matter came up for hearing, Ld. Advocate Shri J.C. Patel, on behalf of the appellants submits that the interim order dt. 30.07.2002 of Hon'ble High Court of Delhi had clearly ruled that, as an interim measure, they could get the consignment of spares released by paying customs duty under protest and subject to orders in the petition filed by them.
2.2 Ld. Advocate also takes me to para-8 of the order dt. 04.06.2015 of the original authority where the authority has in the discussion and findings, has observed that "The crux of the issue in this case revolves around vacating the protest in respect of 28 Bills of Entry.".
2.3 Ld. Advocate also draws my attention to para-13 of the same order where the authority has observed that "..the clearances of goods by the importer under 28 Bills of Entry has to be treated as being under protest..". In spite of such a finding, out of 28 Bills of Entry, refund claims in respect of 15 Bills of Entry have been sanctioned while inexplicably rejecting those relating to 13 Bills of Entry on the ground of limitation.
2.4 He further submits that in the impugned order, the Commissioner (Appeals) has taken note of the chronology of events which have led to the refund claims including the appellant having approached the Hon'ble Delhi High Court and pursuant to which the ONGC and DGH issued recommendatory letters and Essentiality Certificates respectively. He submits that the very fact that the claim was made based on the High Court's interim order would mean that the imported goods have been cleared under protest.
2.5 He draws attention to para-86 of the judgment of Hon'ble Supreme Court in the case of Mafalatlal Industries Ltd. Vs UOI - 1997 (89) ELT 247 (SC) where the Apex Court has clarified that when the duty is paid under the orders of Court (whether by way of an order granting stay, suspension, injunction or otherwise0 pending an appeal/reference/writ petition, it will certainly be a payment under protest and, in such a case, it is obvious, it would not be necessary to lodge the protest as provided by Rule 233B. Ld. Advocate submits that this ratio has been followed in a number of subsequent judgements by higher appellate courts.
2.6 In the circumstances, Ld. Advocate contends that duty paid on all the 28 Bills of Entry should be treated as duty paid under protest.
2.7 He further contends that when the adjudicating authority has found no issue of limitation in respect of refund claims relating to 15 Bill of Entry, there cannot be a different treatment for the remaining 13 Bills of Entry.
3.1 On the other hand, Ld. A.R Shri B. Balamurugan appearing for Revenue opposes the appeal and supports the impugned order. He also made further oral submission, which could be broadly remained as under:
i) Although the interim order of Delhi High Court allowed the appellant to clear goods on payment of duty under protest, no protest was lodged for the imports in Chennai.
ii) The appellants have not sought for any provisional assessment
iii) As observed by Commissioner (Appeals) in the impugned order, the bills of entry on which refund has been claimed were never a subject matter of litigation before the Hon'ble High Court of Delhi or the Hon'ble Supreme Court.
iv) The benefit of notification No.21/2002-Cus. has not been claimed in the present case.
4. In response, ld. Advocate submits that in respect of imports of spares and consumables relating to the same Rig at the same material time, through Mumbai port, on similar grounds the refund claims had been rejected by the original authority. However, on appeal, Commissioner (Appeals) vide order dt. 21.10.2015 allowed their appeal and held that in the circumstances, including the interim order and final order of the Hon'ble High Court of Delhi, the refund cannot be held as time-barred. He submits that this order has been accepted by the department.
5.1 Heard both sides and have gone through the facts.
5.2 The core issue that comes up for decision is whether the discharge of customs duty liability on the imported goods by the appellant pursuant to the High Court order, can be treated as payment of duty under protest.
5.3 The appellants contention is that such duty payment was effected only after the interim order of the Honble High Court of Delhi allowing release of the goods on payment of customs duty, therefore, under protest. The assessment of these Bills of Entry cannot therefore be treated as final. On the other hand, the main plank of the opposition to this prayer by Revenue is that appellant had not lodged any protest for the imports in Chennai, nor, had they sought for provisional assessment and that benefit of Notification No.21/2002-Cus., also was not sought by them.
5.4 It is not disputed that the appellant approached the High Court of Delhi against the ONGCs decision to decline issuance of letters of recommendation for the Essentiality Certificates required for claiming exemption under Customs Notification No.21/2002. Notwithstanding the protestations, of Ld. A.R, I find from the Order-in-Original dt. 28.02.2006 of the first round of adjudication, at page 77 of the appeal papers, that the adjudicating authority therein has categorically stated in para-2 of his order that the importer had sought the benefit of Notification No.21/2002-Cus. Sl.No.214.
5.5 The contention of the department that no protest was lodged at the time of discharge of duty liability is also on a weak footing, since the original authority in de novo proceedings in his order dt. 04.06.2015 has himself observed, in para-8 of his order that , The crux of the issue in this case revolves around vacating the protest in respect of 28 Bills of Entry [emphasis added]. In para-13 of the same order, the adjudicating authority further observes that clearance of the goods by the importer under 28 Bills of Entry has to be treated as being under protest Further ahead in the same para he finds that the importers request for reassessment of the said 28 Bs/E upon furnishing Essentiality Certificate in the light of the Delhi High Court order dt. 11.03.2003 is in order and cannot be denied". Department has not gone in appeal against these findings, nor have they been rebuffed by the Commissioner (Appeals) in the impugned order. In the circumstances, I am unable to fathom how in spite of such clear finding, and observations by the original and lower appellate authority that the duty payment in respect of 28 Bills of Entry has to be treated as paid under protest, nonetheless both those learned authorities have concluded that the refund claims are hit by limitation.
5.6 Be that as it may, once the imported goods are cleared pursuant to the Honble Delhi High Courts interim order dt.30.07.2002, they will necessarily have to be treated, as directed by the court, to be under protest and subject to final orders in that petition. There can then be no question of final assessment in the matter by Customs authorities till the C.W. 4180/2002 dt. 30.07.2002 has been finally disposed and the protest vacated.
5.7 Ld. Advocate has also correctly cited the clarification of the Honble Apex court in para-86 of their judgment in Mafatlal Industries case (supra) that when the duty is paid under the orders of Court (whether by way of an order granting stay, suspension, injunction or otherwise) pending an appeal/reference/writ petition, it will certainly be a payment under protest; in such a case, it is obvious, it would not be necessary to lodge the protest as provided by Rule 233B..
5.8 I further find that in an appeal filed by the very same appellant, the Honble Apex Court in the case of RBF Rig Corporation Vs CC (Imports) Mumbai 2001 (264) ELT 486 (SC) held that once the High Court order was not challenged by Revenue, the same reached finality and the adjudicating authority cannot be permitted to circumvent the order passed by the High Court.
5.9 I am unable to fathom how the lower authorities in their wisdom have found it fit to sanction/uphold the refunds in respect of 15 Bills of Entry, however, in respect of 13 other Bills of Entry having same qualification, the refund claims have been rejected. Interestingly, the Department has not preferred any appeal in respect of the refunds sanctioned.
5.10 It is also discerned that the very same controversy, relating to identical goods, had been raised in respect of the appellant's imports through Mumbai port, and the refund claims filed by them had been similarly rejected by original authority as barred by limitation. However, on appeal, Commissioner (Appeals) vide order-in-Appeal No.MUM-CUSTM-PAX-APP-444/15-16 dt 21.10.2015 reversed the order of the original authority and held that refund cannot be held as time-barred and granted relief. The ld. Advocate submits that this order has not been appealed against by the department and therefore attained finality. In support of his contention, he produced a copy of the RTI reply dt. 29.12.2016 intimating that the aforesaid OIA dt. 21.10.2015 has been accepted by the Committee of Commissioners.
6. Viewed in the light of discussions herein above, I have no hesitation in concluding that discharge of duty liability in respect of 28 Bills of Entry on the strength of the orders of the Honble Delhi High Court, will necessarily have to be treated as payment of duty under protest and hence limitation of one year for claiming refund under Section 27 of the Customs Act, 1962 shall not apply in view of second proviso to sub-section (1) thereof.
7. Appeal therefore is allowed with consequential relief, if any as per law.
(Pronounced in open court on 03.07.2017) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) gs 10 Appeal No.C/40277/2016