Custom, Excise & Service Tax Tribunal
Usha International vs Commissioner Of Customs (I) on 5 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Application No. C/EH/93521/16 Appeal No. C/87003/16 (Arising out of Order-in-Appeal No. MUM-CUSTM-SXP-40/2016-17 dated 27.05.2016 passed by Commissioner of Customs (Appeals), Mumbai) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
Usha International Appellant Vs. Commissioner of Customs (I) Mumbai Respondent Appearance:
Shri Vipin Kumar Jain, Advocate for appellant Shri M.K. Sarangi, Jt. Commr (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 05.12.2016 Date of Decision: 05.12.2016 ORDER NO Per: M.V. Ravindran The appellant has filed an application for early hearing of its appeal on the ground that the issue involved therein lies within a narrow compass and is covered by certain decisions of this Tribunal, the appeal can be disposed of easily. After going through the record we feel that the matter needs to be remanded back to the original authority for de-novo adjudication and therefore after allowing the application, for early hearing with the consent of both sides.
2. This appeal is directed against Order in Appeal No. MUM CUSTM-SXP-40/2016-17 dated 27.5.2016 passed by the Commissioner of Customs (Appeals), Mumbai Customs, Zone-I holding that the appeal filed against a mere letter/communication dated 10.6.2016 issued by the Asst. Commissioner of Customs (Refund) returning the refund applications filed by the Appellant as being premature, was not maintainable as such a communication/letter was neither an order nor a decision for the purposes of Section 128 of the Customs Act, 1962. However, despite holding that the appeal was not maintainable the Commissioner (Appeals), has gone into the correctness of the view taken by the Asst. Commissioner and agreed with the same. This part of the order is also under challenge before us.
3. Heard both sides and perused the records.
4. On perusal of the records, it transpires that the appellant had, in the course of a DRI investigation into import of second hand cranes made a duty deposit of Rs.4.14 crores. On conclusion of investigations, seven separate show cause notices were issued to the appellant wherein the aggregate demand for duty on imports made by the Appellant was quantified to be only Rs.69,99,283/-. Accordingly a claim for refund of the balance amount of Rs.3,44,00,717/- was filed on the ground that the said amount represented excess duty deposits made by the appellant, over and above the alleged duty liability demanded on conclusion of the investigation in all show cause notices put together. The second claim for refund of Rs.69,99,283/- was filed on the ground that the duty deposit to the extent that though covered by Show Cause Notices, was made without any assessment or determination of duty liability, and therefore such payment was not due when the deposit was made. By a deficiency memo dated 9.5.2014 the Appellant was directed to submit to the Asst. Commissioner copies of certain documents such as the triplicate of the Bills of entries, duty challan, other documents as evidence of payment, document for establishing the appellants eligibility to receive the refund amount, order in original/in revision/in appeal and any other order and any other document considered necessary in support of the claim. The Appellant replied to this requisition vide its letter dated 23.5.2014by submitting documents including challan for payment and copies of the audited balance sheets wherein the amount shown as deposited was shown as a receivable from Customs to prove absence of unjust enrichment. Instead of then processing the refund application on merits, the Asst. Commissioner issued a communication dated 10.6.2014 stating that the refund applications had been found to be premature as one of the Show Cause Notice dated 21.11.2013 answerable to the Commissioner of Customs (Import), NCH, MumbaiI proposing appropriation of the deposit of Rs.4.14 crores was yet to be adjudicated. This letter further stated that a fresh refund application could be submitted by the Appellant, in case any refund became due to it after the adjudication of the show cause notices. Aggrieved by this letter, an appeal was filed by the appellant before the Commissioner (Appeals), which was dismissed on two independent counts; first that the communication/letter dated 10.6.2014 was a mere administrative action against which no appeal could be filed under Section 128 of the Customs Act and, secondly that he agreed with the prima facie view expressed by the Asst. Commissioner that both the applications were premature till the Show Cause Notice was finally heard and disposed of by the Commissioner.
5. Two issues fall for consideration in this appeal. The first is whether the Appellant had a right to file an appeal before the Commissioner (Appeals) against a mere communication/letter dated 10.6.2014. The second one is whether the Commissioner (Appeals) was right in upholding the view of the Asst. Commissioner that the refund application were premature in view of the pendency of the Show Cause Notices.
6. On the issue of maintainability, we find that Section 128 of the Customs Act, permits an appeal to be filed before the Commissioner (Appeals) against any decision ororder passed by an officer of Customs. The words any decision are very wide in their amplitude and would cover a decision holding that the refund applications premature. Such a view is undoubtedly a decision affecting the right of the affected party and is therefore appealable. The finding of the Commissioner (Appeals) is that such a communication is merely an administrative action is absurd as the Asst. Commissioner, while deciding a refund application filed under Section 27 of the Customs Act, is required to act as a quasi-judicial authority. The legal position in this regard is settled by several decision of this Tribunal such as Koya& Co. Construction P Ltd vs CCE 20100 (262) ELT 1014 (Tri-Bang), Hyderabad Industries Ltd vs CCE 2002 (145) ELT 463 (Tri-Del), Gujarat Ambuja Cement Ltd vs CCE 2006 (197) ELT 39 (Tri-Del) and Bhagwati Gases vs CCE, Jaipur 2008 (226) ELT 468 (Tri-Del). The relevant passage of the Tribunals order in the case of Bhagwati Gases sums up the legal position in this regard and is extracted below.
8.?It would thus appear that the question as to whether particular letter or communication amounts to order or decision so as to make the appeal maintainable would depend on facts of each case. If on consideration of the facts and circumstances, it is found that the order communicated by the impugned letter is such as to affect the rights of the party, the appeal should be maintainable. We put a pointed question to the learned Departmental Representative that if the appeal is held to be not maintainable, what would be the remedy of the appellant. The law does not countenance a situation where the person is rendered remediless. In the circumstances of the case, the only option available to the appellant was to approach the Commissioner and the Commissioner was obliged to decide the matter on merit. The order of the Commissioner holding the appeal to be not maintainable cannot, therefore, be sustained. Accordingly, we set-aside the order of the Commissioner and remit the matter back to him to pass a fresh order on merit in accordance with law as early as possible preferably within two months of receipt of a copy of this order.
7. Having held that the appeal was maintainable before the Commissioner (Appeals), and had therefore been wrongly rejected as not maintainable, we would have in the usual course remitted the matter back to the Commissioner (Appeals) for a decision afresh, but for the fact that the Commissioner (Appeals) has also, in his order agreed with the view of the Asst. Commissioner that the refund application was pre-mature. In para 11 the Commissioner (Appeals) has held as under:
11. On going through the communication, I find that the communication is only in the nature of a letter which can neither be considered as an Order nor can it said to be a decision. For, the Assistant Commissioner has yet to process both the refund applications and only a deficiency memo dated 5.3.2014 has been issued so far. As on date of communication, I find that neither a order nor a decision has been taken with reference to this deficiency memo. Therefore, under the circumstances, I would agree with the prima-facie view expressed by the Assistant Commissioner that both the applications were premature till the referred show cause notice is finally heard and disposed off by the Commissioner.
8. We may state at the outset that the view of the Assistant Commissioner in his letter dated 10.6.2014 not at a prima facie view, as observed by the Commissioner (Appeals). The Asst. Commissioner was categorical and emphatic in saying that the refund application was premature as the Show Cause Notices were pending adjudication. The Commissioner (Appeals) has also unequivocally endorsed this view of the Asst. Commissioner, though he has wrongly referred to the view of the Asst. Commissioner as a prima facie view. Since both the lower authorities have termed the refund applications as premature, and have also given grounds for coming to this conclusion, we need to decide upon the correctness of this view.
9. Shri Vipin Jain, Ld. Counsel appearing for the Appellant has assailed this view by citing a plethora of judgments and decisions of which two judgments, one of the Punjab & Haryana High Court and other of the Madras High Court are directly on the point. The judgment of the Punjab & Haryana High Court in the case of Century Metal Recycling Pvt Ltd vs Union of India 2009 (234) ELT 234 was dealing with a situation where refund was claimed of the amounts deposited in the course of investigation and there was a dispute, as in the present case between the two parties on the question whether such payments had been made voluntarily or under duress. The High Court held that the question whether the payment was voluntary or under coercion was irrelevant and that as long as there was an assessment and demand, the amount deposited could not be appropriated. The relevant paragraph of this judgement is extracted below.
13.?As far as the amount deposited by the petitioners is concerned, case of the petitioners is that the same was deposited under coercion. Case of the respondents was that the same was deposited voluntarily. Whatever be the position, unless there is assessment and demand, the amount deposited by the petitioners cannot be appropriated. No justification has been shown for retaining the amount deposited, except saying that since it was voluntarily deposited. In view of this admitted position, the petitioners are entitled to be returned the amount paid. A division bench of the Madras High Court in the case of Sanmar Foundaries Ltd vs Commissioner reported in 2015 (325) ELT 854 held that the revenue had no right to retain amounts deposited in the course of an investigation, unless such amounts had been paid either towards a confirmed demand or if such payments were being made in terms of Section 11A(6) of the Central Excise Act, 1944, which corresponds to Section 28(2) of the Customs Act. Various judgments, including the judgement of the Punjab & Haryana High Court were taken note of in this order. We therefore hold that the findings of the lower authorities that the claim for refund was premature is untenable.
10. Even otherwise, we find that once an application of refund has been filed before the refund sanctioning authority, the said authority is duty bound to decide the refund application one way or the other. The refund application can either be rejected or allowed in part or in full. The provisions of Section 27 do not entitle the refund sanctioning authority to return the refund application by terming the same to be premature. Therefore the action of the Asst. Commissioner in terming the application as premature is really an act of refusal to exercise a statutory duty to decide upon the refund application one way or the other. For this reason also, the order of the lower authorities is untenable.
11. Since the Asst. Commissioner has not decided on the merits of the matter and has skirted the entire issue by terming the claim as premature, we remit the matter back to the file of the Asst. Commissioner with directions to decide upon the refund applications on merits, in accordance with law after giving adequate opportunity to the appellant to meet and answer any objection/(s) that he may as to the correctness of the claim made by the appellant. We further direct the Asst. Commissioner to bear in mind the contents of Board circular No.267/78 /2013CX-8 dated 11.12.2013 and the judgement of the Bombay High Court dated 13.3.2014 in Writ Petition No.2955 of 2012 filed by Haren Venture Pvt Ltd, wherein the refund sanctioning authorities have been directed not to raise objections to a refund application in a piecemeal manner, but to raise the mall in one go and to dispose them off expeditiously to avoid prolongation of litigation. In the circumstances of the present case, we direct the Asst. Commissioner to decide the matter a fresh expeditiously within a period of 3 months of receipt of this order. Appeal is allowed by remand in above terms.
(Operative part pronounced in Court) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) nsk 1 7 Application No. C/EH/93521/16 Appeal No. C/87003/16