Custom, Excise & Service Tax Tribunal
M/S. Alagendran Exports (P) Ltd vs Commissioner Of Customs (Import), ... on 9 December, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. C/137/2007
(Arising out of Order-in-Appeal C. Cus. No. 66/2007 dated 31.1.2007 passed by the Commissioner of Customs (Appeals), Chennai)
For approval and signature:
Honble Shri Mathew John, Technical Member
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 the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
M/s. Alagendran Exports (P) Ltd. Appellant
Vs.
Commissioner of Customs (Import), Chennai Respondent
Appearance Shri N. Viswanathan, Advocate, for the Appellant Ms. Indidra Sisupal, AC (AR) for the Respondent CORAM Honble Shri Mathew John, Technical Member Date of Hearing: 09.12.2013 Date of Decision: 09.12.2013 Final Order No. 40618/2013 The appellant imported RBD Palmolein and filed Bill of Entry No. 27429 dated 14.9.2001 for warehousing the goods. Later they filed an ex-bond Bill of Entry No. 19772 dated 19.9.2001 for clearance of 500 MTs of RBD Palmolein. At the relevant time, the goods were to be assessed based on tariff value notified under Section 14(2) of the Customs Act,1962. The said Bill of Entry was assessed finally on 24.9.2001, on which date the tariff value prevailing was USD 372 per MT and based on such value the Bill of Entry was assessed and handed over the appellant. However, the appellant paid duty on the goods on 9.10.2001 and removed the goods from the warehouse on 9.10.2001. On the same date, Notification No. 52/2001 (NT) dated 9.10.2001 happened to be issued under section 14(2) of the Customs Act by which the tariff value of the goods was reduced to USD 302 per MT vide.
2. At the relevant time, the provisions under Section 15 of the Customs Act relating to Date for determining the rate of duty and tariff valuation of imported goods read as under:-
Section 15. Date for determination of rate of duty and tariff valuation of imported goods:- (1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force,-
(a) in the case of goods entered for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section;
(b) in the case of goods cleared from a warehouse under section 68, on the date on which the goods are actually removed from the warehouse;
(c) in the case of any other goods, on the date of payment of duty;
Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be. The learned Advocate submits that the appellant has followed the instructions and practice in vogue and the department has to follow its own instructions.
3. As per provision of 15 (1) (b) above, the tariff value of USD 302 per MT should have been adopted for assessing the goods which were removed on 09-10-2001. The appellant filed a refund claim on 23.10.2001 asking for refund of excess duty paid. The Department did not process the refund claim till the year 2006. Finally, the Department rejected the refund claim vide Order-in-Original No. 5591/2006 dated 16.11.2006. The adjudicating authority held that the Bill of Entry was not assessed provisionally. Neither was duty paid under protest. Hence he ruled that the refund claim involved re-assessment and as per the decision of the Honble Apex Court in the case of M/s. Super Cassette Industries Vs. Commissioner of Customs 2004 (163) ELT A116 (SC) and M/s. Priya Blue Industries Vs. Commissioner of Customs 2004 (172) ELT 145 (SC) re-assessment cannot be done in a refund claim without challenging the original assessment and therefore refund claim was rejected. The appellant filed appeal before the Commissioner (Appeals), who upheld the order of the original authority. Aggrieved by the order of the Commissioner (Appeals), the appellant has filed this appeal.
2. Arguing for the appellant, the learned Advocate submits that both the lower authorities have not disputed the fact that the tariff value prevailing on the date of removal of the goods from the warehouse should have been applied for assessment and the value applied was not correct and there was excess payment of duty by the appellant. The only ground on which the refund claim has been rejected is that the appellant did not challenge the assessment under Section 128 of the Customs Act by filing an appeal. He submits that when the Bill of Entry was assessed there was no dispute between the Department and the importer regarding the tariff value in force. So there was no dispute to be adjudicated. Further even on the date of actual clearance of the goods from the warehouse the appellant was not aware that a new Tariff value was notified which the appellant came to know only in the evening of that day. The officers of the Department also may not have been aware because such information can take a few days to percolate to the public. The proceedings on record shows that there was no dispute about the tariff value prevailing on the date of clearance which was adopted for the assessment of the Bill of Entry but such assessment was based on incomplete information. The decision of the Honble Supreme Court in the case of CCE Vs. Flock India 2000 (120) ELT 285 (SC) and Priya Blue Industries Vs. Commissioner 2004 (172) ELT 145 (SC) were the cases wherein there were disputes at the time of assessment between the Department and the assessee and it was decided by the assessing officer through assessment orders. It was in such circumstances that the Hon. Apex Court held that assessment order had to be challenged by filing appeal under Section 128 of the Customs Act or the relevant provision under Central Excise Act. The learned Advocate pointed out that this matter has been examined by the Honble Delhi High Court in the case of Aman Medical Products Ltd. Vs. Commissioner of Customs 2010 (250) ELT 30 (Del.) and the Delhi High Court has held that only if a lis existed at the time of assessment there was a need for pursuing remedy through Section 128. Where excess duty was paid due to ignorance remedy can be sought by filing refund claim under section 27 of the Customs Act in time. He submits that the present case falls within the scope of the ratio laid down by the Delhi High Court in the case of Aman Medicals (Supra). He also relies on few decisions of the Tribunal which followed the decision of Aman Medical Products (supra).
3. He also relies on the decision of the Tribunal in the case of Tata Iron & Steel Co. Ltd. Vs. Commissioner of Customs 2006 (202) ELT 719 where a refund due to clerical error/accidental slip or omission was allowed by the Tribunal after noting the pronouncement of the Apex Court in the case of Priya Blue Industries (supra). He relies on para 2.1 of the said decision which reads as under:-
2.1?The Customs Manual of Instructions has been issued on 11th September, 2001 by the Central Board of Excise & Customs (in short the Board). In Chapter 15 of the said Manual it has been clarified that in cases where excess payment of duty has been made due to incorrect assessment by the Customs authorities, the importer must file a claim under Section 27 of the Customs Act for refund of the excess amounts. The relevant portion of the Manual [Para 1 of Ch. 15] is produced herein below:-
On import and export of goods, at times, it is found that the duty had been paid in excess of what was actually leviable on the goods. Such excess payment may be due to lack of information on the part of the importer/exporter or non-submission of documents required for claim of lower value or rate of duty. Sometimes, such excess payment of duty may be done to shortage/short landing, pilferage of goods or even incorrect assessment of duty by Customs. In such cases, refund of excess amount of duty paid can be claimed by the importer or exporter. If any excess interest has been paid by the importer/exporter on the amount of duty paid in excess, its refund claim can also be claimed. Section 27 of the Customs Act, 1962 refers in this regard (Emphasis supplied). The impugned order of the Commissioner (Appeals) conspicuously glosses over the said binding Instructions of the Central Board of Excise Customs while conveniently referring to another Chapter and para thereof to support his patently erroneous finding. It is settled law that Circulars and Instructions issued by the Central Board of Excise & Customs are binding on the Department unless they are contrary to the law laid down by the Supreme Court on the issue. In this connection reliance be made on the following decisions of the Supreme Court :
(i) Fenner India Ltd. v. Collector of Central Excise, 2004 (167) E.L.T. 18 (S.C.)
(ii) Hindustan Aeronautics Ltd. v. Commissioner of Income-tax, 2000 (119) E.L.T. 513 (S.C.) by the learned Advocate is well founded. Commissioner (Appeals) was bound to follow the Instructions of the Board as in the Manual. There is no decision of the Supreme Court, including the one referred to in the said order and the one which have laid down that even in case like this as referred in the Boards Manual of instruction, there cannot be any refund, without assailing the Assessment Order. This order, therefore, being contrary to the said binding Instructions of the board is invalid and on this ground required to be set aside.
4. He also submits that the authorities should have on their own exercised powers under Section 149, 154 and re-assessment under Section 17 of the Customs Act. Therefore, he prays that the refund may be granted.
5. Opposing the prayer, the learned AR for Revenue submits that all the decisions relied on by the learned Advocate was in relation to duty paid inadvertently. She submits that in this case assessment was done according to the notification which was in existence at the time of assessment of Bill Entry. She further relies on the decision of the Hon. Apex Court in the case of Escorts Ltd. Vs. Union of India 1998 (97) ELT 211 (SC) in which it was ruled that an assessment of a Bill of Entry also is an assessment order. Hence, the Commissioner (Appeals) has held that the said assessment order should have been challenged under Section 128. She submits that an order of assessment made by one officer cannot be reviewed by another officer in the same rank. In the process of sanctioning refund claim such anomaly would come into play. She also points out that the lower authorities have not examined the merits of the claim. The original authority has recorded that it was premature go into other aspects of the claim.
6. I have considered submissions of both sides. I find that this is a case where there was no lis between the two parties at the time of assessment of the Bill of Entry or at the time of clearance of the goods from the warehouse because it appears that the fact that a notification was issued on the date of clearance was not known to either side. Therefore, it cannot be said that the assessment finalized a dispute which was existing between the two parties.
7. I have considered the decision of the Apex Court in the case Escorts Limited Vs. UOI. The said decision was on the question as to from which date the time limit laid down in section 27 for filing a refund claim would start. There is nothing in the order which would suggest that a patent mistake which was not adjudicated upon could not be rectified through the refund mechanism under section 27 of the Customs Act In fact in that case the assessees refund claim was rejected on the ground that the claim was filed beyond the time limit prescribed and not for the reason that the order was not challenged under section 128. There is nothing in this decision which is contrary to the decision of the Delhi High Court in the case of Aman Medicals.
8. Thereafter we have considered CCE Vs. Flock (India) Pvt. Ltd-2000 (120) E.L.T. 285 (S.C.). That decision was in the matter of Central Excise levy. In that case there was a dispute between the assessee and the department at the time of filing of classification list. The Assistant Commissioner revised the classification claimed by the assessee by issuing a speaking order. The order was not challenged. Subsequently they filed refund claim on the ground that the classification determined originally was wrong. In the facts of the said case the Hon. Apex Court held that,-
-------there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant.------
9. I have also considered the decision of the Hon. Apex Court in the case of Super Cassettes Industries Ltd. v. Commissioner - 2004 (163) E.L.T. A116 (S.C.). This order is just a dismissal order without giving detailed reasons. So I have looked at the decision of the Tribunal in the matter reported at Super Cassettes Industries Ltd. Vs. CC - 2003 (162) E.L.T. 1148 (Tri. - Del.). This order also does not bring out the issue whether there was a dispute between the importer and the department at the time of assessment. I have also considered the decision of the Hon. Apex Court in the case of Priya Blue Industries Ltd (Supra) which decision was given following the decision in the case of Flock (India) Pvt. Ltd (supra). It is seen that the duty in that case was paid under protest which implies that there was a dispute between the department and the importer initially. In the facts of the present case there was no dispute between the appellant and the Department at the time of import but an assessment was done based apparently on wrong figures which both sides did not notice. By processing the refund claim there is no review of an adjudication done earlier because no dispute was adjudicated by the assessment order. The fact that the appellant could have challenged the assessment under section 128 of the Customs Act cannot be a reason to deny processing of a refund claim if filed within the four corners of the provisions under section 27 of Customs Act.
10. The Honble Delhi High Court has analyzed the judgment of the Hon. Apex Court in the case of Priya Blue Industries (supra) and held that it related to payment of duty under protest will apply only if there was a dispute between the two parties at the time of import where there are inadvertent errors, the remedy under Section 27 can be resorted to without challenging the so called assessment order on the Bill of Entry.
11. However, I note that the lower authorities have not examined the unjust enrichment issue. Therefore, the matter is remitted to the adjudicating authority for examining the refund claim to see whether the requirement under section 27(1A) of the Customs Act has been complied with and then decide the claim.
12. The appeal is disposed of accordingly.
(Dictated and pronounced in open court) (Mathew John) Technical Member Rex 2