Custom, Excise & Service Tax Tribunal
M/S. Suchi Fasteners Pvt. Limited vs Commissioner Of Central Excise & ... on 5 October, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : C/10267,10268/2013 (Arising out of OIA-CCEA-SRT-I-SSP-238-2012-13U-S-128A OF CUSTOMS ACT1962 and OIA-CCEA-SRT-I/SSP-237/2012-13U/S/128A OF CUSTOMS ACT1962 both dated 03.01.2013, Passed by Commissioner (Appeals) Central Excise, & Customs, Surat ) M/s. Suchi Fasteners Pvt. Limited : Appellant (s) VERSUS Commissioner of Central Excise & Customs, Surat : Respondent (s)
Represented by :
For Appellant (s) : Shri S.R. Dixit, Advocate For Respondent (s) : Shri Lalatendu Patra, Authorised Representative For approval and signature :
Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes CORAM :
Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 05.10.2015 ORDER No. A/11387-11388/2015 Dated 05.10.2015 Per : Mr. P.M. Saleem These appeal are filed by the appellant against two separate order of the Commissioner (Appeals) on an identical issue. Therefore, both the appeals are taken up together for disposal.
2. The appellant is a unit situated in Surat Special Economic Zone (SSEZ). In a nut-shell, the issue involved here is whether the Customs Officer posted in the Special Economic Zone unit has the power to sanction refund of customs duty or not. In Appeal No. C/10267/2013, the appellant filed refund of Customs duty of Rs. 2,79,924.21, due to reduction of Basic Customs duty (BCD) from 5% to 2.5% vide Notification No. 54/2010-Cus. dated 29.04.2010. In Appeal No. C/10268/2013, the appellant filed refund claim of Rs. 54,733.00, 4% SAD under Notification No. 104/2007-Cus dated 14.09.2007. Both refund claims were rejected by the Specified Officer of Customs, Surat Special Economic Zone, vide Orders-in-Original dated 19.08.2011 and 29.07.2011.
3. Heard both sides. Learned Counsel for the appellant argued vehemently that the Customs duty has been paid under the provisions of the Customs Act and therefore, the appellant is eligible for refunds due under the Customs Act. It is perverse on the part of Custom officers posted in Surat Special Economic Zone to reject such refund claims on the ground that they do not have jurisdiction to refund the Customs duty paid. He also submitted that the Hon'ble Supreme Court, in the case of Mafatlal Industries Limited & Ors. vs. UOI & Ors. (1997) 5 SC 536 held that, when an amount is collected as customs duty though legally not correct, the provisions of Customs Act would apply and refund provisions of Customs Act would also apply in such cases. He also relied upon the decision of the Hon'ble Gujarat High Court in the case of Anita Exports vs. UOI 2014-TIOL-2162-HC-AHM-CUS.
4. On the other hand, the learned Authorised Representative for the Revenue vehemently opposed the contentions of the learned Counsel. He submitted that there are no provisions to refund Customs duty by the proper officer of Customs in the SEZ Act. Hence, the proper officer has no jurisdiction and it would be illegal for him to sanction such refund. He also submitted that there are many other issues which have to be examined before sanction of refund such as, whether assessment order has been challenged by the appellant and the question of unjust-enrichment etc.
5. It is observed that the issue is no more res-integra in view of the decision of the Honble High Court of Gujarat. In the case of Anita Exports vs. UOI (supra), the issue involved was examined by the Hon'ble High Court. Extracts of the relevant portions of the judgment are reproduced below :-
1. Short question which cannot wait indefinitely arises in this group of petitions. Though facts are slightly different in each case, the central question is as to which authority would be competent to entertain and dispose of the refund claims of units situated within the Special Economic Zones which claims arise out of over payments of customs duty, redemption fine or penalties under the Customs Act, 1962. As the facts would emerge, the respondents have brought about a situation where presently no authority is allowed to accept such refund claims. Neither the Commissioner (Customs) or his subordinate nor the authorities under the Special Economic Zones Act (SEZ Act for short) are taking any responsibility for processing such refund claims of the SEZ units. .
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15.?In our opinion, the entire approach was thoroughly incorrect. Firstly, without making statutory changes, it was simply not possible for the Ministry of Finance by a mere communication to stop the Commissioner of Customs from processing refund claims which was his statutory duty. Secondly, if such mechanism was to be changed for SEZ units from the authorities of the Customs Commissionerate to Commissionerate (SEZ), there had to be matching provisions providing such mechanism under the SEZ law. This admittedly was not done. In fact, till date it has not been done. Thirdly, all the refund claims, appeals and reviews were to returned with an advise to approach the Ministry of Commerce. We may recall this communication was issued by the Ministry of Finance. We wonder what Ministry of Commerce would do with such refund applications, appeals and reviews. There is no clarification whatsoever in this connection. The Ministry of Commerce per se did not have any statutory power either to process the refund claims or entertain appeals or reviews. Appeals and reviews are also creation of statute. Provisions for refund are made in the Customs Act and Central Excise Act. They can be taken away by statutory amendments. The powers can be shifted into another authority if a valid law is made in order to do so. By a mere letter, Ministry of Finance could not have suspended the power of Commissioner (Customs) to exercise his statutory functions. It is undisputed that duty was collected by the Commissioner of Customs. Whatever be the character of the duty, the Commissioner of Customs collected the same on a perceived opinion that unit concerned was required to pay such customs duty, redemption fine or penalties as the case may be. If later on such duty, fine or penalty is declared illegal, the person from whom the same has been collected would have a right to seek refund thereof. Such right would be covered by statutory provisions particularly, Section 27 contained in the Customs Act, 1962. Such refund application would have to be made within the time permitted under Section 27 of the Customs Act, 1962. It may also be subject to verification on the question of unjust enrichment. Many issues may arise which are not clear to us. But one thing is clear that such issues can be decided only by the authority under the Customs Act.
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18.?Under the circumstances, in our opinion, the directives issued by the Ministry of Finance in its letter dated 1-11-2012 are invalid and would have no force of law. It is declared that unless proper mechanism is framed under the SEZ laws and statutory provisions are enacted/amended, the Commissionerate of Customs would continue to hold the authority under Section 27 of the Customs Act, 1962 to entertain refund claims of excess payment of customs duty, redemption fine or penalties as the case may be, adjudicated and collected by the Customs authority under the Customs Act, 1962, even with respect to units situated in SEZ areas. Whatever refund claims being returned to the petitioners by the Customs Commissionerate, the petitioners would represent the same to the appropriate authority. If the petitioners do so latest by 15-12-2014, all such applications shall relate back to the first presentation before the Customs authority. The period of limitation for presenting such application and computation of interest in ease eventually the refund is granted, shall be reckoned from such date.
6. In view of the above, the impugned orders of the lower authorities can not be sustained. The refund applications filed by the appellant have to be examined by the Customs Officer under the provisions of Customs Act and have to be disposed of on merits in accordance with the law. Therefore, these matters are required to be remanded to the proper officer of Customs at the SEZ for examining the refund claims filed by the appellant and take action as per law. Needless to say that the appellant should be given reasonable opportunity for being heard.
7. At this stage, learned Counsel makes a mention that the issue is quite old and a direction may be given for early disposal by the proper officer. As the matter has been delayed on procedural wrangles, it would be proper to dispose of the matter as expeditiously as possible. Therefore, the proper officer is directed that he may dispose of these matters within a time frame of three months from the date of receipt of this order.
8. Both the appeals are allowed by way of remand to the proper officer of Customs, SEZ, Surat with the above directions.
(Order dictated and pronounced in the open Court) (P.M. Saleem) Member (Technical) .KL 5