Custom, Excise & Service Tax Tribunal
M/S.Indian Oil Corporation Ltd vs Cc, New Delhi on 16 March, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Customs Appeal No.C/950/2005-Cus
(Arising out of Order-in-Appeal No.CC(A)/348/ACU/Delhi-I/2005 dated 30.08.2005 passed by the CC(A), New Delhi)
For approval and signature:
Honble Mr. S.S.Kang, Vice President
Honble Mr.M.Veeraiyan, 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?
M/s.Indian Oil Corporation Ltd. Appellants
Vs.
CC, New Delhi Respondent
Present for the Appellant: Shri B.l.Narsimhan, Advocate
Present for the Respondent: Shri Sonal Bajaj, DR
Coram: Honble Mr. S.S.Kang, Vice President
Honble Mr.M.Veeraiyan, Member (Technical)
Date of Hearing: 16.03.2011
Date of decision: 16.03.2011
ORDER NO._______________
PER: M.VEERAIYAN
This is an appeal against the order of the Commissioner(Appeals) No.CC(A)/348/ACU/Delhi-I/2005 dated 30.08.2005 by which the order-in-original rejecting refund claim of Rs.80,92,411/- as barred by limitation under Section 27 of Customs Act, 1962 stands upheld.
2. Heard both sides.
3. The relevant facts, in brief, are that the goods imported vide bills of entry dated 24.8.98 and 2.2.99 were cleared provisionally and provisional assessments were subsequently finalized on 216.99 and 15.6.99 respectively. It is not in dispute that the finally assessed duty was lower than the duty provisionally paid by the appellants at the time of clearance of the goods. The excess amount paid is amounting to Rs.80,92,411/-. The appellants claimed that they were not communicated the outcome of the finalization of the assessments which they came to know only 20.11.03 and that they filed the refund claim on 14.1.04 and the same stands rejected by the original authority on the ground that the same have been filed beyond the time limit prescribed under section 27 for preferring refund claim. This order stands upheld by the Commissioner (Appeals).
4. Learned Advocate for the appellants draws our attention to section 18 of the Customs Act, 1962 deal with provisional assessments both prior to 13.7.06 after amendment with effect from 13.7.06 and submits that for the period prior to 13.7.06, any excess paid duty was bound to be refunded suo-moto by the department. In this regard, he relies on the decision of the Honble High Court of Gujarat in the case of CC vs. Hindalco Industries Ltd. reported in 2008 (231) ELT 36 wherein it has been categorically held that upto 12.7.06, the Revenue was bound in law to make the refund without any claim being required to be made by an assessee fore refund of excess duty paid due to finalization of assessment. He also relies on the decision of the Larger Bench of the Tribunal in the case of CC, Kandla vs. Hindustan Zinc Ltd. reported in 2009 (910 ELT 255 (CESTAT-LB) which followed the decision of the Honble Gujarat High Court in the case of Hindalco Industries Ltd and held that refund claim on finalization of provisional assessment was to be made without claim being submitted by assessee in terms of Section 27. He also submits that the department filed appeal against the said order of the Larger Bench of the Tribunal and the same has been rejected by the Honble Gujarat High Court.
5. Ld.SDR defended the order of the Commissioner (Appeals). Referring to explanation to section 27, he submits that time limit for making refund application in respect of provisional assessment has been specifically prescribed as one year from the date of finalization of assessment and therefore by implication the time limit shall apply. He further submits that any refund arising out of provisional assessment, is also subject to provisions of unjust enrichment.
6. We have carefully considered the submissions from both sides and perused the records. The impugned imports have taken place during August, 1998 to February,1999. The assessments were provisional at the time of clearance which got finalized in June, 1999. It is not in dispute that the appellants have paid excess during the time of clearance, based on the assessments which were provisional. Honble Gujarat High Court in the case of Hindalco Industries Ltd cited (surpa) considered the provisions of section 18 before and after amendment dt.13.7.06 and held as under:
19.?This can be considered from a slightly different angle. While introducing the Taxation Laws (Amendment) Bill, 2005 (Bill No. 74 of 2005) the Notes on Clauses in relation to Section 18 of the Act indicate that sub-sections (3), (4) and (5) to Section 18 of the Act, have been inserted to provide for a mechanism to regularise the payments of duty short levied and interest thereon and duties that are to be refunded on finalization of provisional assessment and in this context in the report of the Standing Committee on Finance it has specifically been noted that this amendment became necessary because Section 18 of the Act which provides for provisional assessment of duty presently (i.e. upto 12-7-2006) does not provide for various issues arising from the finalization of provisional assessment. Thus it becomes apparent that the amendment in question is substantive in nature when one finds that various provisions have been inserted which were not forming part of the original Section 18 of the Act as it stood upto 12-7-2006. It is not possible to stale that the provisions for payment of interest on duty short levied or entitlement to interest on duty paid in excess of the finally assessed duty can be considered to be clarificatory provisions and in the same vein the newly inserted sub-section (5) deserves consideration. Thus in effect upto 12-7-2006 no provision existed in Section 18 of the Act which would permit revenue to invoke principles of unjust enrichment in relation to duty paid in excess, found to be so, upon finalization of provisional assessment under Section 18 of the Act.
20.?Hence, the reference to provisions of Section 27 of the Act which generally deals with claim for refund of duty cannot be of any assistance to the revenue. Similarly the definition of the term assessment under Section 2(2) of the Act also cannot help the revenue in light of the specific provisions of Section 18 of the Act which override all other provisions of the Act. The contention that the Court should not permit a person to derive unjust benefit also does not merit acceptance. The Court can only read the provisions and the statute as they stand, and if necessary, interpret the same but the Court cannot legislate. This is a salutary principle of interpretation. Furthermore, as noticed hereinbefore, the Apex Court has in no uncertain terms drawn the distinction between making of refund and claiming of refund. The High Court cannot equate the two in light of the authoritative pronouncement of law by the Apex Court.
21.?Therefore, on both counts, in light of the authorities referred to hereinbefore, and on interpretation of provisions of Section 18 of the Act, on finalisation of assessment if any excess duty is found to have been paid at the time of provisional assessment Revenue is bound in law to make the refund without any claim being required to be made by an assessee. This would be the position in law upto 12-7-2006 and not thereafter.
7. In other words, it has been held that prior to 13.07.2006 on finalization of provisional assessment, the department was bound to refund excess duty paid by the assessee without any claim to be preferred by the assessee. It is also held categorically that there is no justification for reading the provision of section 27 into section 18 of Customs Act, 1962. Under these circumstances, the time limit prescribed under section 27 in respect of refund claim arising out of provisional assessment may not alter the specific provisions of section 18 prior to 13.07.2006 as interpreted by Honble Gujarat High Court in the case of Hindalco Industries Ltd cited (surpa).
8. In view of the above, the appeal is allowed with consequential relief as per law.
(Pronounced in the open court) (S.S.KANG) VICE PRESIDENT (M.VEERAIYAN) MEMEBR (TECHNICAL) mk 6