Custom, Excise & Service Tax Tribunal
M/S. Indian Farmers Fertilisers Co-Op ... vs Commissioner Of Customs (Import), Nch ... on 7 March, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO APPEAL NO. C/1325/02 (Arising out of Order-in-Appeal No. 358/2002-MCH dt. 28.6.2002 passed by the Commissioner of Customs (Import) Mumbai. For approval and signature: Hon'ble Shri M. V. Ravindran, Member (Judicial) ============================================================
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? ============================================================= M/s. Indian Farmers Fertilisers Co-op Ltd. : Appellant VS Commissioner of Customs (Import), NCH Mumbai Respondent Appearance Shri Ramesh Nair, Advocate for Appellant Dr. Y.D. Banga, Authorized Representative (SDR) CORAM: Shri M. V. Ravindran, Member (Judicial) Date of decision 07/03/08 ORDER NO.................................................... Per : Shri M. V. Ravindran, Member (Judicial)
This appeal is directed against the order-in-Appeal No. 54/2005/CAC/CC/PK dt. 05/08/05.
2. The issue involved in this case is regarding the rejection of the refund claim filed by the appellant. The appellant discharged the duty liability by paying the duty at the rate of 50% instead of paying 5%. Subsequently, they filed an application for the refund of the excess duty which was rejected, which traveled upto Hon'ble Supreme Court and Supreme Court vide order dt. 13.3.2001 held as under:-
"Learned counsel for the appellants submits that the real issue here is that, apparently as a result of a clerical error, countervailing duty was charged at the rate of fifty per cent instead of five per cent. He submits that the appellants will make an application for rectification of the error under Section 154 of the Customs Act and that the application may be considered by the authorities in law. This is recorded.
The civil appeal is, accordingly disposed of".
Against such a direction by the Hon'ble Supreme Court, applicant filed an application for rectification of mistake under the provisions of Section 154. It was considered by the adjudicating authority and vide order No.S/6-B-1955/89 R dt. 13.12.2001 rectified a mistake of the payment of the duty at the rate of 5% but rejected claim for the refund of the excess duty, as being time barred, by invoking the provisions of Section 27 of the Customs Act, 1962. On an appeal the Ld. Commissioner (Appeals) upheld the order.
3. The Ld. Counsel appearing on behalf of the appellant draws my attention to the fact that in an identical issue, Hon'ble High Court of Judicature at Bombay, in the case of Keshari Steels Vs. Collector of Customs, Bombay [2000 (115) E.L.T. 320 (Bom.)] has settled the law and he also submits that the Revenue took up this case to the Supreme Court in Special Leave Petition, it was dismissed the Hon'ble Supreme Court in the case of Collector Vs. Keshari steels as reported at 2000 (121) E.L.T. A139(S.C.)]. He submits that this decision is followed by the Division Bench in the case of Goa Shipyard Ltd. Vs.C.C., ACC, Sahar as reported at [2006(72) R.L.T. 479(CESTAT-Mum)] in the said judgment and order is followed by the co-ordinate bench at Delhi in the case of Canon India Pvt. Ltd. Vs. Commissioner of Customs, Mumbai as reported at [2006(200) E.L.T. 83 (Tri. Del.)].
4. The Ld. SDR would contend that the issue involved in this case is a arithmetical error which has been allowed by the adjudicating authority. It is his submission that any refund arising out of such rectification of mistake is also bound by the provisions of Section 27 of the Act. The question of unjust enrichment and the provisions of Section 27 over ride all other sections in the case of refund of the duty which has been collected by the Revenue. It is also his submission that the appellant has to first satisfy the question of unjust enrichment, to get refund.
5. In rejoinder, the Ld. Counsel submits that the issue of unjust enrichment has not been considered by the lower authorities.
6. Considered the submissions made at length by both sides and perused the records. The Ld. Commissioner (Appeals) while dismissing the appeal filed by the appellant held as under:-
"However I find that the facts of the case on which reliance is placed upon by the appellants were different. In that case the importers were informed by the department itself that there is an excess payment of duty and they were advised to file refund claim. The refund claim was filed by them within a month of receipt of the letter from the department and hence the Hon'ble Bombay High Court held that in such circumstances the refund claim should not have been rejected on the ground of limitation under provisions of Section 27 of Customs, Act, 1962.
Here the case is entirely different. The appellants of their own had filed the refund claim under provisions of Section 27, which was rejected, on the ground of limitation. Thereafter, they requested for correction of the error under provisions of Section 154 of the Customs Act, 1952, which was ultimately allowed at the intervention of the Hon'ble Supreme Court. However, I agree with the lower authority that this will not automatically entitle the appellants for refund of duty and he has placed reliance on the decision of Hon'ble Supreme Court in the matter of Mafatlal Industries as reported in [1997 (89) ELT 247 (SC)].
It has been pleaded by the ld. Counsel that there would be no relevance of Section 154 if time limit of Section 27 is applied. If this interpretation is accepted then there would be no relevance of time limit prescribed under Section 27. In my opinion provisions of Section 154 do not override Section 27".
It can be noticed from the above reproduced portion of the order, that the Ld. Commissioner has not considered the law as has been settled by the Hon'ble High Court of Bombay in the case of Keshari Steels. Their Lordships in the case of Keshari Steels (Supra) held as under:-
"In our view, in the present case, there was no question at all of applying the provisions of Section 27 of the Act. The Assistant Collector of Customs pointed out that there was a mistake in recovering Rs. 25,136.10 from the Petitioners. For that purpose, the Petitioner made an application for refund. Section 154 specifically provides for correction of clerical or arithmetical mistake in any decision or order passed by an officer of Customs under the Act. Once that is corrected, the Petitioners are entitled to have refund of the said amount, which is paid due to an arithmetical mistake".
It is to be noted that the said judgment was carried in appeal by the Revenue and was dismissed by the Hon'ble Supreme Court. I find that in an identical issue, the division bench in the case of Goa Shipyard Ltd. (Supra) had considered an identical issue (as is before me) on which they held as under:-
"We next deal with the first objection raised by the learned SDR as to whether a refund claim can be considered as a result of correction of clerical error under Section 154 independent of Section 27(1) and more particularly without taking into account the time limits prescribed therein. The learned SDR has cited the decision of the Hon'ble Supreme Court in the case of Mafatlal Industries (supra) in this regard. He has in particular drawn our attention to paragraph 99 of the said decision. We find that Mafatlal (supra) has not dealt with a case of refund arising out of correction made under Section 154. It deals with cases of refund arising out of misinterpreting or misapplying excise and customs laws in Para 99 (i) and refund arising from unconditional levy in Para 99 (i) and states that in case of the former the refunds have to be dealt under the customs and excise law while in case of the latter, the principles under the Limitation Act, 1963 will apply. Mafatlal (supra) therefore, is not of help in deciding a case of refund arising out of an independent provision relating to corrections under Section 154 of the Customs Act, 1962 itself. On the other hand, we find that the learned Consultant for the appellants has cited two decisions of the Hon'ble High Court of Bombay in the case of TELCO (supra) and Keshari Steels (supra) of which the latter decision has also been confirmed by the Hon'ble Supreme Court. Both these decisions permit refunds in similar cases of correction of errors under Section 154 independent of the provisions of Section 27(1). This line of decision has also been followed by the Tribunal in ABB Ltd. (supra). As such, we hold that refunds as a consequence of correction of clerical error under the independent provisions of Section 154 is admissible without filing a refund claim under Section 27(1). We also note that Section 154 is a latter provision of law under which a correction can be made at any time. We, further, note that Section 27(1) has not been given overriding effect over other sections of the Customs Act, 1962 as has been done in the case of Section 27(2)".
I find that the lower authority has not considered these binding judgments and have totally overlooked this aspect.. To my mind, the provisions of Section 154 are independent of the provisions of Section 27, as has been held by the Hon'ble High Court followed by the co-ordinate bench in Goa Shipyard Ltd. case. As such, if it is admitted and accepted by the lower authorities that there is an error in calculating the duty, the appellant is eligible for the refund of the excess duty so paid. At the same time, the judgment of the constitution Bench of the Supreme Court in the case of Mafatlal Industries would strictly apply, for doctrine of unjust enrichment. It is seen from the records that the lower authority have not given any finding on the issue of unjust enrichment.
7. Accordingly, I am of the view that the rejection of the refund claim of the appellant on the ground of time bar under the provisions of Section 27 of the Customs Act, 1962 is not in accordance with the law, as has been settled by the higher judicial forums. Hence, the impugned order holding it so, is unsustainable and liable to be set aside and I do so.
8. Since the question of unjust enrichment will apply to this case and as has been fairly admitted by the Ld. Advocate, it was not considered by the lower authority, I find it fit in the interest of justice, the matter should be remanded back to the original authority to consider the question of unjust enrichment. In light of the above, the appeal is allowed and the matter is remanded back to the adjudicating authority, for a limited question of considering the doctrine of unjust enrichment. Ordered accordingly.
(M. V. Ravindran) Member (Judicial) Sm 5