Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (Imp), Mumbai vs L.K. Steel Factory P. Ltd on 2 January, 2008
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No.II Appeal No. C/773/07 (Arising out Order-in-Appeal No. 179/2007/MCH/DC/GR III 06 dated 8.6.07 passed by the Commissioner of Customs (Appeals), Mumbai) For approval and signature: Honble Mr.K.K.Agarwal, Member (Technical) ====================================================
1. Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
Commissioner of Customs (Imp), Mumbai Appellant Vs. L.K. Steel Factory P. Ltd. Respondent Appearance:
Shri N.A. Sayed, JDR for the appellant Shri Mayur Shroff, Advocate for the respondent CORAM:
Honble Mr.K.K.Agarwal, Member (Technical) Date of hearing : 2.1.2008 Date of decision: 2.1.2008 O R D E R No:..
Per: Honble Mr.K.K.Agarwal, Member (Technical) The brief facts of the case are that the appellants filed a bill of entry dated 26.7.2006 for clearance of silk fabrics and apart from applicable customs duty paid special additional duty at the rate of 4% and cleared the goods accordingly. Later on they realized that the special additional duty at the rate of 4% was exempted under notification 20/06 dated 1.3.2006. They accordingly filed a refund claim of Rs. 1,68,063/- being the excess amount paid. The claim was rejected by the original authority on the ground that once the assessment order has not been challenged a refund claim cannot be filed in view of the Apex Court decision in the case of Priya Blue 2004 (172) ELT 145. On appeal the Commissioner (Appeals) held that since SAD was exempted by notification at the material time, the payment thereon is clearly accidental slip on the part of the appellant which being a clerical error can be rectified under Section 154 of the Customs Act and he accordingly remanded the case back to the original authority for denovo assessment for taking into account the submissions made by the appellant.
2. The revenue in its appeal has submitted that once the assessments have been made on the basis of the declaration made in the bills of entry non-claim of the exemption cannot be considered to be a clerical or arithmetic mistake which can be rectified under section 154 and placed its reliance on the decision of MMTC vs. CC Mumbai 1987 (28) ELT 128. Reference was also invited to CESTAT decision in the case of Jindal Saw Ltd. vs. CC Kandla 2006 (202) ELT 800 wherein the Tribunal has held the benefit of the provisions of Section 154 can be availed only if there is excess payment of duty due to calculation error or if the exchange rate is not correctly calculated or incorrect currency is quoted for valuation of goods. In that case the importer had cleared the consignment paying the tariff rate and subsequently had noticed that they have not claimed the benefit of notification that would have enabled them to pay lesser rate of duty. The Tribunal held that since the importer had admitted that they have paid excess duty erroneously they should have challenged the assessment of bill of entry instead of taking a shortcut of filing a refund. The assessment of bills of entry being unchallenged, has attained finality and the assessment cannot be reopened by adopting the route of refund claim. In view of this, it was submitted that the Commissioner (Appeals) order is incorrect and needs to be set aside.
3. The learned advocate for the appellants relied upon the decision of the Kerala High court in the case of UOI vs. Aluminium Inds. Ltd. 1996 (83) ELT 41 where goods were allowed to be cleared by the assessing officer at lower rate of duty because of ignorance of withdrawal of exemption in view of the fact that in between, the exemption was withdrawn which fact was not informed to the assessing officer, the error in such goods was held to be rectifiable under section 154 of the Customs Act. Similarly, in the case of Recording Centre vs. CC 1993 (66) ELT 292 where two orders were passed by the Asst. Commissioner with reference to the same transaction viz. one on issue of classification for customs duty and other on issue of classification for the purpose of countervailing duty, it was held that subsequent order was issued for correcting the omission under section 154 of the Customs Act and not for modifying the earlier order. Reference was also made to the larger bench decision in the case of Polymer Paints 2001 (137) ELT 1275 wherein it was held that the clerical error can be corrected at any time but the consequential relief, if any, will be governed by the Section 27(1) ibid. Reference was also invited to the decision in Tata Iron & Steel Co. Ltd. 2006 (202) ELT 719 wherein it was held that excess levy due to incorrect assessment by custom authority on account of clerical error inasmuch as an exchange value wrongly computed on account of conversion in wrong currency can be corrected at any time and the question of filing any appeal by the assessment order would not arise. Reference was also made to circular no. 528/27/86-Cus dated 29.4.87 under which due wrong mentioning of the tariff classification the exemption was extended by subsequent amendment and this amendment was clarified to be applicable in respect of the past imports also as the correction was on account of accidental slip or omission falling within the purview of section 154 of the Customs Act, 1962. In view of this, it was submitted that non-claim in exemption was a clerical error which could have been rectified under section 154 and therefore refund cannot be denied.
4. I have considered the submissions. I find that the Tribunal has in the case of MMTC vs. CC cited supra wherein an identical issue was involved has held that non-claim for exemption is not an arithmetic or clerical error covered by section 154 of the Customs Act and refund cannot be claimed unless the assessment is challenged. The larger bench of the Tribunal has in the case of Eurotex Indus. & Exports Ltd. 2007 (216) ELT 137 also held, that unless an assessment is challenged even in those cases where the assessment was passed as per the declaration of the assessee, a refund is not maintainable. The Kerala high court decision referred to by the learned advocate for the appellant was relevant in the circumstances narrated therein inasmuch as the withdrawal of the exemption notification was a very recent one which has not come to the notice of the assessing officer, whereas in the present case the exemption was not a recent one and was there for quite sometime but was not claimed by the appellant. A claim for exemption needs a careful scrutiny by the assessing officer before it is allowed. A non-claiming of exemption cannot therefore be considered as clerical mistake. Even otherwise I find that the appeal was against the rejection of refund and not against an order refusing to rectify the mistake. The two are separate issues and as held by the Tribunal in the case of MMTC recalculation under 154 should not involve any refund or short levy for which section 27 and 28 of the Customs Act have to prevail. Since in this case recalculation involves a refund it cannot be allowed. When the matter before the Commissioner (Appeals) was regarding the rejection of refund, he could not have ordered reassessment of the bills of entry, which is entirely separate issue. In view of this, I find no merits in the respondents contention and accordingly set aside the order of the Commissioner (Appeals) and allow the revenues appeal.
K.K.Agarwal Member (Technical) sr