Custom, Excise & Service Tax Tribunal
Vetrivel Minerals vs Tuticorin on 8 April, 2024
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE - | TRIBUNAL, | | SOUTH ZONAL BENCH, CHENNAI COURT HALL No. III CUSTOMS APPEAL No.41042 of 2016 (Arising out of Order-in-Appeal No.39/2016 dated 09.03.2016passed by Commissioner of Customs and Central Excise (Appeals), No.1, Williams Road, Cantonment, Tiruchirappalli 620 001 M/s Vetrivel Minerals (V.V.Minerals) ... Appellant Branch: 424-416, AMRL SEZ, AMRL International Tech City, Rajakkamangalam Village, Nanguneri Taluk, Tirunelveli District 627 108 Versus The Commissioner of Customs -- ...Respondent No.1, Williams Road, Cantonment, Trichirappalli 620 001 APPEARANCE : Mr.Ramamurthy, Advocate For the Appellant Ms. Anandalakshmi Ganeshram, Supdt. (A.R) For the Respondent a CORAM : HON'BLE MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) DATE OF HEARING : 21.07.2023 DATE OF DECISION : 68-04. 202Y INTERIM ORDER No. 40001/2024 DATED 17.01.2024 FINAL ORDER No. 4-0 297 [0 otg L Customs Appeal No.41042 of 2016 ORDER:
Per Ms. SULEKHA BEEVI, C.S.
1. Brief facts are that the appellant, M/s.Vetrivel Minerals _(V.V.Minerals) is a Special Economic Zone Unit (SEZ Unit) situated at 424-416, AMRL SEZ, AMRL International Tech City, Rajakkamangalam Village, Nunguneri, Tirunelveli District. The appellant which is a partnership firm has also another unit, which is a 100% EOU unit situated at IZC Keeraikaranthattu, Thiziyenvilai, Tirunelveli. The appellant firm is engaged in the business of mining, processing and export of minerals.
1.1. The notification no.27/2011-Cus dated 1.3.2011, imposed export duty on specified goods; it was subsequently, amended by notification no.15/2013-Cus dated 01.03.2013. By virtue of these notifications, the unprocessed ilmenite (CTH 26140010) was leviable to 10% export duty. Whereas the export duty for processed iimenite (26140020) was at the rate of 5%.
1.2 The issue in this appeal pertains to the refund claim filed by the appellant (SEZ, Unit) for the refund of duty paid by them under protest for the export of ilmenite vide shipping bill dated29.05.2013.
1.3. The facts narrated in the impugned order take a slight twist and deviation from the facts as narrated in the order-in-original dated 30.06.2015. It would be convenient and beneficial to begin with the d--
Customs Appeal No.41042 of 2016 facts as narrated by the adjudicating authority in the order-in-original dated 30.06.2015.
1.4 The appellant herein is the SEZ Unit. The appellant filed a Shipping Bill No.5673479 dated 29.05.2013 through their Customs Broker for export of ilmenite Upgraded (processed) by classifying the goods under CTH 26140020. As per the instruction of the assessment section, the exporter was asked to pay export duty of Rs.90,83,243/- at 10%. The appellant paid the duty under protest vide their protest letter dated 03.06.2013.
1.5 It requires to be mentioned here that for export made by an SEZ unit, no duties are payable; whereas for export made by EOQU, the export duty is 5% / 10% on processed / unprocessed ilmenite.
1.6 Subsequently, the appellant filed a refund claim dated 27.02.2014 claiming refund of the above amount stating that, the subject shipping bill was filed by SEZ, and being an SEZ unit, they are totally exempt from paying export duty. The refund section obtained clarification from the Export Assessment Section and it was clarified vide C.No.VIII/06/23/2013-Export dated 11.06.2014, wherein it was stated that when the said unit is registered as SEZ, they need not pay duty for export of cargo originated from SEZ unit.
1.7. The Deputy Commissioner (Refund), Custom House, Tuticorin vide letter dated 21.07.2014 relying on the judgement in the case of M/s. Priya Blue Industries Ltd. Vs. Commissioner of Customs 2004 (172) ELT 145 S.C. rejected the refund claim observing that unless de Customs Appeal No.41042 of 2016 the assessment (self assessment) dated 6.6.2013 was reviewed or reassessed, the refund claim is not maintainable.
1.8 Consequently, the appellant herein, vide letter dated 2.8.2014, submitted that as the duty was paid under protest, it would sufficiently mean that the assessment is also challenged. The appellant relied on the decision of Tribunal in the case of Commissioner of Cust.C.E & ST, Guntur Vs Fairway Trading Company Pvt. Ltd. 2014 (304) ELT 286 Tri-Bang).
1.9 The appellant again submitted letter dated 30.10.2014 reiterating these points. Further, vide letters dated 10.11.2014 and 21.04.2015, the appellant furnished copies of documents like ARE - I, copy of the B-17 Bond executed with the Deputy Commissioner, C.E. Tuticorin for the movement of goods from SEZ, Naguneri to Bonded Warehouse..
_ 1.10 It appeared from the documents that the exporter in spite of being a SEZ unit had wrongly filed the subject shipping bill before the Customs house. Consequently, the refund claim also had to be filed before the Customs and the request for reassessment also. Only if the exports are made from 100% EOU, the shipping bill is to be filed before customs.
1.11 The adjudicating authority in order dated30.06.2015 (para 7 to
16) has made detailed discussions in this regard of having wrongly filed the shipping bill before the Customs house instead of directly _ Customs Appeal No.41042 of 2016 filing before the SEZ itself. It is stated that the adjudicating authority verified documents, and also called for details from Authorised officer of SEZ as to whether the exported goods originated from SEZ or EOU. After confirming that the goods originated from SEZ (para 11 of OIO) the original authority ordered for reassessment of the Shipping Bill and vacated the protest and held that appellant is eligible for refund.
1.12 Against this order, the department filed an appeal before the Commissioner (Appeals). The relevant part of the grounds of appeal would help to understand the view taken by department to file appeal before the Commissioner (Appeals).
"In this case it appears that M/s. Vetrivel Minerals(VV Minerals) have filed the particular shipping bill No.5673479 dated 29.05.2013 in the Customs House, Tuticorin and have paid Export duty under protest. Rule 46 of SEZ Act 2005 clearly lays down the procedure for export as mentioned below:
Rule 46 of SEZ Act 2005 stipulates the following procedure for Export---
(1) The procedure for export from Special Economic Zone through seaports or airports or Inland Container Depot or Container Freight Station or Land Customs Station or by Post or by Courier or by Personal Carriage, as the case may be, shail be as under:------
The SEZ Unit shall file Shipping Bill, in quadruplicate, with the Authorised Officer of Customs in the Special Economic Zone together with relevant documents, namely, invoice, packing list and Currency Declaration Form (GR) {in duplicate):
The exporter should have filed before the said authorised officer at the SEZ itself in order to avail export benefits of nil rate of duty. Clearly the exporter has not followed the procedure for export as per the SEZ Act 2005 for reasons whatsoever. ignorance of law is no excuse. As such even if the cargo belong to the SEZ unit as claimed by the exporter since the exporter has not followed the d--
Customs Appeal No.41042 of 2016 specified procedure of filing the shipping bill before the authorised officer of the SEZ as laid down in the Rule 46 of SEZ Act 2005 they are not eligible for any exemption made available to them under Section 26 (1) {b} of SEZ Act 2005 as a SEZ Unit.
At the time of assessment of the shipping bill the officers have insisted for payment of export duty only on the grounds that there were insufficient documents to prove that the cargo exported was of SEZ origin. M/s VV Mineral, Keeraikaranthattu, Tisayanvilai have been regularly exporting ilmeniteupgraded (pracessed) from Tuticorin Custom House, by filing Shipping Bill under EOU and payment of duty at 10%. In this context filing Shipping Bill under self- assessment with declaring goods to be of SEZ origin and claiming NIL rate of duty raised serious doubts in the mind of proper officer. Accordinglyupon scrutiny of documents at the time of exportation the proper officer was not satisfied that goods were of SEZ Origin and advised exporters to file Shipping Bill with SEZ in order to avail NIL rate of duty or else goods will be treated as EOU origin and re-assessment would be done accordingly. The exporter did not file Shipping Bill with SEZ and accordingly the proper officer re-assessed the Shipping Bill treating the goods to be of EOU origin chargeable to duty @ 10% which the exporter paid under protest. The exporter had the choice to avail genuine exemption by filing Shipping Bill in SEZ as per laws but instead preferred to file in this Custom House. it clearly shows that exporter was not in position to either file shipping bill in SEZ or prove beyond doubt to proper officer that the origin of goods as SEZ. As such the contention of proper officer at the time of exportation demanding duty @ 10% is proper and valid. If the exporter had exported the cargo from the SEZ itself by filing Shipping Bili with the Authorised Officer of the SEZ the payment of export duty would not have arisen at all. The fact that the exporter was ready to pay the export duty (even though under protest) preferring to export from Custom House Tuticorin implies that the cargo do not belong to an SEZ unit.
Further the order passed by the Assistant Commissioner (Exports) is not a reassessment order involving valuation, classification etc. but amounts to post shipment amendment and change of scheme from EOU to SEZ. In this regard it may be noted that the authority to permit an amendment / conversion of Shipping Bills from one scheme to another is vested with the Commissioner as per the Board's Circular No.4/2004 -- Customs dated 16.01.2004. As such Order
-- in -- Original passed by the Assistant Commissioner of Customs for reassessment does not appear to be legal and proper.
Further after the Shipping Bill has been assessed and after the cargo has been exported on payment of appropriate export duty (even though under protest) the Assistant Commissioner (Exports) does not have any power to amend the shipping bill and extend the benefit of NIL rate if export duty and deciding the origin of the cargo based on documents which were not inexistence at the time of export contrary to the provisions of Section 149 of the Customs Act 1962.
Customs Appeal No.41042 of 2016 As per section 149 of Customs Act 1962 no amendment of a shipping bill can be done other than the goods are exported except on the basis of documentary evidence which was in existence at the time the goods were cleared for export. The Assistant Commissioner has ordered for the amendment of shipping bill by extending the benefits of SEZ Rules based on documents produced by the exporter on a later date proving the origin of the cargo. Such documents did not exist at the time of export of the cargo, hence, cannot be correlated with the cargo exported. Apart from the factual position, it may also be noted that such amendment power vests with the Additional Commissioner and the Assistant Commissioner cannot pass an order encroaching the Jurisdiction of his higher officer. Hence, the Order -- In -- Original passed by the Assistant Commissioner of Customs for reassessment of the Shipping Bill is in violation of Section 149 of the Customs Act 1962."
1.13 From the above, it can be seen that the appeal is filed by department against order of reassessment before the Commissioner (Appeals) on two main grounds. (1) That the cargo exported is not of SEZ unit (2) After export and payment of appropriate duty there is no power to amend the shipping bill and to decide the origin of cargo. It isthus the view of the department that the order passed by the adjudicating authority for re-assessment is in violation of section 149 of the Customs. Act, 1962. It requires to be mentioned here that Section 149 of the Customs Act, 1962 deals with amendment of documents and not assessment / reassessment.
1.14 The relevant part of Review Order dated 28.08.2015 for filing the appeal before Commissioner (Appeals) would make it easy to understand the deviation that has happened after the OfO dated 30.06.2015. The relevant part reads as under.
"Moreover, the Assistant Commissioner (Export) has verified that documents like Invoice, packing list etc. and extended the benefit of NIL rate of ~ duty. Here it is to noted that the proper officer viz., examination officer at the time of export who has seen the consignment physically and also scrutinised the documents had reported in his examination report (which is in system) "THAT THE CARGO IS 100% EOU" and it is construed the cargo is 100% EOU only. At this juncture, the Assistant Commissioner (Export) failed to verify the \_ Customs Appeal No.41042 of 2016 Examination Report in the system which is the most important evidence at the time of exportation for the said Shipping Bill. Hence the contention in OfO that based on documentary evidence amendment is permitted is not tenable."
1.15 As per the Review order, it is the case of department, that the proper officer viz; the examination officer at the time of export who has seen the consignment physically, also scrutinised the documents and had reported in his examination (which is in system) "That the cargo is 100% EOU". It would be beneficial to mention here that the Ld. Counsel for appellant has pointed out that it is mentioned on the:
shipping bill as "consignment was not opened for physical examination by customs" The above ground raised by department in the review order is not in accordance with the details of the shipping bill.
1.16 Interestingly, pursuant to this review order the appeal filed by the department before the Commissioner (Appeals) is not against the SEZ unit. The appeal is filed against the 100% EOU unit. The address of the respondent in the cause title of the appeal filed by department before Commission (Appeals) shows as "M/s.V.V.Minerals, Keeraikaranthattu, Thiziyenvilai, Tirunelveli. This address is that of EOU unit. The SEZ unit is not made a party to the appeal at all. The SEZ Unit had paid the duty under protest, and it is the SEZ unit which has filed the refund claim. However, the department chose to file the appeal against the EQU unit only, by basing on the review order that the export goods originated from EOU. .
| Customs Appeal No.41042 of 2016 1.17 Before the Commissioner (Appeals), the SEZ unit filed cross objections in the appeal filed by department. The said cross objection is placed in pages 63 to 7i of this appeal paper book. In the CO, the appellant herein has clearly stated the difference in address and also stated that the export was made by SEZ, duty was paid by them and refund claim filed by them. Though in para 3, of the impugned order the Commissioner (Appeals) has recorded that cross objections were filed, the same is not seen considered at all.
1.18 After hearing of the department appeal, the Commissioner (Appeals) vide order impugned herein held that the appellant should have filed the shipping bill before the Authorised officer at the SEZ itself in order to avail nil duty benefit extended to SEZ. The appellant had not followed the said procedure for export as per SEZ Act, and instead filed the Shipping Bill at the Customs house. Further, the examination report in the system clearly shows that the cargo is of 100% EOU. It was further held that adjudicating authority has no power to order for re-assessment of shipping bill. Thus, the order passed by adjudicating authority for reassessment and vacating the protest was set aside.
1.19 Aggrieved by such order, the appellant, the SEZ unit, is now before the Tribunal.
2. The Ld. Counsel Shri. K. Ramamurthy, Advocate appeared and argued for the appellant. The submissions are summarised as under:
| 10 Customs Appeal No.41042 of 2016
a) In respect of the exports made by the EOU unit of the appellant, the nature of Ilmenite (processed or unprocessed) and the applicable rate of export duty was continuously a subject matter of dispute. While the EOQU unit had claimed classification under CTH 26140020 subject to the rate of duty at 5%, the department had sought to classify the exported Ilmenite by EOU under the CTH 26140010 subject to the rate of duty at 10%. In respect of the exports made by the EQU unit, the department on finalization of assessment had classified the goods under CTH 26140010 liable to export duty at the rate of 10% of FOB value and this was also upheld by the Commissioner (Appeals}. The (appellant's) EOU unit had preferred an appeal before this Tribunal as Appeal No. C/41854/2013 against the order-in-appeal passed by Commissioner (Appeals).
b) This Tribunal vide its Final Order dated 41412/2015 dated 14-10-2015 had in a detailed order held that the goods exported by the EOU unit was Ilmenite processed / upgraded and is to be classified under CTH 26140020 subject to export duty at the rate of 5%, as adopted by the EOU unit.
The dispute as to the nature of the export goods -- whether it was Ilmenite (unprocessed) or Ilmenite (Upgraded) thus was settled in favour of the EOU unit only in the year 2015 vide the order of this Tribunal dated 14-10-2015.
c) The Appellant SEZ unit had filed shipping bill no. 5673479 dated 29-05-2013 for the export of "IImenite upgraded". At the L-
Li Customs Appeal No.41042 of 2016 instance of the assessment Section, the Appellant had self- assessed and paid under protest, duty of Rs. 90,83,243/- vide challan SC-34 No. 56790 dated 03-06-2013; this was since the classification of Ilmenite was not settled in the year 2013 and had been the subject matter of dispute between the EOU unit and the department. The Appellant had vide its letter dated 03-06-2013 addressed the Assistant Commissioner of Customs (Export) and emphasized that the shipment was of processed Ilmenite and was classifiable under CTH 26140020 which is liable to export duty at the rate of 5% only and that the payment of duty at the rate of 10% (which was the rate applicable to unprocessed Ilmenite classifiable under CTH 26140010) was made under protest.
d) The shipping bill was printed on 06-06-2013 and the let export order was given by the Superintendent of Customs on 07- 06-2013. Subsequently, the Appellant filed a refund application dated 27-02-2014 for the amount paid under protest since exports made by an SEZ unit is exempt from the levy of customs duty. The said refund claim was rejected by the Deputy Commissioner of Customs (Refund) vide order dated 21-07-2014 on the ground that unless the proper officer makes an order contrary to the payment of the export duty or is reviewed/modified in appeal, the assessment dated 06-06-2013 would stand undisturbed. In other words, it was stated that refund claim cannot be considered without reassessment of the shipping Dill.
_ 12 Customs Appeal No.41042 of 2016
e) Upon the Appellant's request to reassess the shipping bil! under Section 17(4) & (5) of the Customs Act, 1962, the Assistant Commissioner vide Order No. 1356/2015 dated 30-06-2015 re-assessed the shipping bill at Nil export duty, vacated the protest lodged by the appellant, and held that appellant is eligible for refund of the export duty that has been paid under protest. While making such conclusion the original authority had made detailed enquiry as to whether the goods had originated from SEZ. The original authority relied upon the letter issued by the Authorized Officer, AMRL SEZ, Nanguneri, Tirunelveli, dated 15-06-2015, which confirmed that the appellant is an SEZ unit; and a letter from the Superintendent of Central Excise, City Range, dated 19- 06-2015, that the exported goods originated from the Appellant's SEZ unit and had been exported out of the SEZ unit stock held at the warehouse at Tuticorin. The order-in-original expressly recorded that it had been passed after examining the documents relating to the shipping bill like invoice, ARE-1, and also observed that all the documents contained a declaration that the export was SEZ cargo/SEZ invoice and that the shipping bill was filed by SEZ unit.
f) The Respondent (department), on 28-08-2015, issued a review order and authorization to file appeal against VV Minerals, Keeraikaranthatttu, Tisayanvilai, a 100% EOU which is a separate legal entity with a distinct IEC, on the erroneous premise that the EOU had filed the subject shipping bill dated 29-05-2013. The
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13Customs Appeal! No.41042 of 2016 Respondent had also, without any application of mind and without noticing the express authentication in the shipping bill that the export consignment was not examined, quoted an examination report available to the department alone in its internal server to conclude that the goods were of 100% EOU origin and not that of SEZ origin. The Respondent further erred in its presumption that the Appellant had made an application for amendment of the shipping bill.
g) The department has preferred the appeal before the Commissioner (Appeals) against VV Minerals, Keeraikaranthatttu, Tisayanvilai, a 100% EOU, a separate legai entity, on the premise that the order-in-original permitted amendment of the shipping bill under Section 149 of the Act. The Appellant (SEZ) was not made a party to the appeal and had to file a cross-objection against the very maintainability of the appeal.
"h) Without considering the cross-objection of the Appellant (SEZ), the Commissioner (Appeals) passed the impugned order dated 09-03-2016 against VV Minerals, Keeraikaranthatttu, Tisayanvilai, a 100% EOU based on completely misplaced facts and the erroneous premise which plagued the review order. The view taken by the department that it was a case of amendment of shipping bill is also erroneous and misconception of facts. The request made by appellant was for reassessment and not amendment.
|_ 14 Customs Appeal No.41042 of 2016
i) The review order and authorization dated 28-08-2015 issued by the Respondent therefore suffers from material errors and is void ab initio as it has directed the Assistant Commissioner of Customs (Review) to file an appeal before the Commissioner (Appeals) Trichy against the order in original no 1365/2015 dated 30-06-2015 passed in the case of the Appellant SEZ unit for the exports made by the Appellant SEZ unit, in which the Appellant SEZ is not made a party at all.
j) The appeal before the Commissioner (Appeals) is void ab initio and without jurisdiction in as much as the direction to the Assistant Commissioner to file an appeal is flawed and the appeal itself is void since it has made a third party (EOU) as the Respondent in the appeal. The Appellant, (SEZ) though the necessary party, was not made a party. Though the appellant exporter had filed cross objections before the Commissioner (Appeals) on the specific ground that the appeal has been filed against the wrong legal entity the same was not considered.
k} The Commissioner (Appeals) did not have any jurisdiction to entertain the department appeal in as much as the appeal was not filed against the proper party and the authorization for appeal issued by the respondent under Section 129D was void ab initio. The impugned order-in-appeal dated 09-03-2016 of the First Appellate Authority is void ab initio as it has been passed against a third party unconnected with the subject consignment on the erroneous premise that the subject shipping bill dated 29-05-2013 _ 15 Customs Appeal No.41042 of 2016 was filed by the 100% EOU M/s. V.V. Minerals, Keeraikaranthattu, Tisayanvilai, Tirunelveli District - 625657 whereas it was actually filed by the appellant SEZ unit.
e) The impugned order-in-appeal has failed to consider that the Rule 46(1) of the SEZ Rules is a procedural provision for the ease of the SEZ units and does not constitute a condition for availment of the benefit of exemption on exports. The impugned order-in- appeal has proceeded on the erroneous premise that the Appellant had sought for an amendment of the shipping bill under Section 149 of the Customs Act, 1962. The appellant had made no application for amendment under Section 149 but had only sought for re-assessment under Section 17(4) & (5) of the Customs Act, 1962, and the order-in-original no. 1356/2015 dated 30-06-2015 is only an order of re-assessment and not one of amendment.
m) The impugned order-in-appeal has failed to take note that the order-in-original had made concrete factual findings on examination of the shipping bili no. 9673479 dated 29-05-2013 and the related documents like invoice, ARE-1, and that all documents carry a declaration and verification that the consignment was SEZ cargo/SEZ invoice. The impugned order-in- appeal has failed to consider that the Authorized Officer, AMRL SEZ, Nanguneri, Tirunelveli had confirmed vide letter No 78/2015 dated 15-06-2015 that the Appellant is an SEZ unit and that the Superintendent of Central Excise, City Range, C-50, Sipcot Industrial Complex vide letter O.C.No. 1224 dated 19-06-2015 had
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16Customs Appeal No.41042 of 2016 confirmed that the goods exported under the Shipping Bill No 5673479 dated 29-05-2013 were of SEZ origin and had been exported out of SEZ unit stock held at the warehouse at Tuticorin.
n) The order-in-original dated 30-06-2015 had ordered re- assessment as under Section 17(4) & (5) of the Customs Act, 1962.The original authority had validly exercised his powers under Section 17 of the Act which was well within his jurisdiction.
0) Rule 46 of the SEZ Rules is only procedural and directory in nature for the ease and benefit of the SEZ units and it does not provide for any adverse consequences in relation to claim of exemption by an SEZ unit. The appellant's claim of exemption must be considered in the light of the doctrine of substantial compliance.
The following decisions were relied by the Ld. Counsel.
1. HPCL v. Dilbahar Singh, AIR 2014 SC 3708
2. Municipal Committee, Hoshiarpur v. Punjab State Electricity Board, 2010 AIR SCW 7020
3. State of Punjab v. Davinder Pal Singh, AIR 2012 SC 364
4. Dimension Data India Pvt. Ltd. v. CC, 2021 (376) ELT 192 (Bom)
5. Supreme Industries v. CBIC, MANU/MH/1726/2020
6. Hero. Cycles v. UOI, 2009 (240) ELT 490 (Bom) _ 17 Customs Appeal No.41042 of 2016
7. CC vw. Sakthi Sugars Ltd., 2020(372) ELT 577 (Tri-
Chennai)
8. CC v. Hari Chand Shri Gopal, 2010 (260) ELT 3 SC
3. The Ld. A.R. Ms.Anandalakshmi Ganeshram, Supdt. (AR) supported the findings in the impugned order.
4. Heard both sides.
5. The issues that arise for consideration are(i) whether the impugned order passed by Commissioner (Appeals) is ab initio void due to lack of jurisdiction? (ii) whether the request for reassessment and consequent claim for refund considered by the original authority is legal and proper?
5.1 The foremost argument put forward by the Ld. Counsel for appellant is that the impugned order is passed without jurisdiction 'and is ab initio void. It is the case of the appellant that the duty was paid under protest by the appellant (SEZ unit) and that it is the appellant who has filed the refund claim. So, also the request for re- assessment was filed by them. The original authority vide Order-in- Original dated 30.6.2015 has passed the order in favour of appellant. However, against this order, the department has filed appeal impleading the EOU unit only. The SEZ unit and EOU are separate legal entities, though arising out of the same partnership firm. The addresses are different. Their pan card number, IEC Code, etc. are different. This being so, the department ought not to have filed the appeal only against the EOU. The appellant is a necessary party to \ 18 Customs Appeal No.41042 of 2016 the appeal. The appellant is the dominus fitus to the proceeding. As the duty is paid by appellant, it is the appellant who will be affected by the decision in the appeal. The commissioner (Appeals) ought to nave considered the cross objection filed by appellant and directed the department to implead the necessary party. If the department fails to take steps to implead the party who is indispensable to the proceeding, the appeal ought to have been dismissed for non-joinder of necessary party. In effect the determination of the issue in appeal by the Commissioner (Appeals) does not bind the appellant herein. The impugned order cannot be said to have been passed against the appellant due to this defect. It is the burden of the party who files the appeal to procure the presence of all indispensable parties in the proceeding. The impugned order suffers from the infirmity of non-
joinder of necessary parties.
5.2 Arguments have been advanced on the merits of the case also. The main ground alleged by the department is that the export cargo has originated from EOU unit, and therefore the duty paid is appropriate. To substantiate this contention the only evidence is the averment in the appeal (filed before the Commissioner (Appeals) ] that the system at Customs House showed that the cargo originated from EOQU. However, there is no documentary evidence to support this contention raised by department. Whereas, the original authority has called for report from the Authorised Office of SEZ and verified documents in the nature of ARE - 1, SEZ invoice etc, to conclude that i 19 Customs Appeal No.41042 of 2016 the goods have originated from SEZ unit and that the shipping bill happened to be filed before the Customs House.
5.3 The filing of shipping bill by an exporter is now-a-daysdone by | online method. The appellant, while filing the shipping bill instead of selecting the SEZ portal to file the shipping bill, has filed the shipping bill through the portal of Customs house which has resulted in the present situation. The Rule 46 of SEZ Rules 2006 gives the procedure for export by SEZ unit. As per 46 (1), the SEZ unit shall file shipping bill in quadruplicate, with the Authorised Officer of Customs in the SEZ with relevant documents, namely, invoice, packing list, Currency Declaration Form (GR) etc. The shipping bill is then registered, and assigned a running seria! number and assessed by the Authorised Officer as is followed in the case of exports under free shipping bill without any requirement of the counter signature. The goods shall not be subjected to routine examination and 'Let Export Order' shall be given on the basis of self-certification by the unit.
5.4 The department does not have a case that the shipping bil! was not accompanied by the above requisite documents. In fact, the original authority has examined all these documents to arrive at the conclusion that the goods originated from SEZ unit. This being so, on the procedural lapse of filing the shipping bill before Customs house, the department cannot retain the duty collected from the appellant, which otherwise is not required to be paid. Section 26 of the SEZ Act 2005 exempts the SEZ unit all goods for export from payment of 2 20 Customs Appeal No.41042 of 2016 duty. It is a statutory benefit. Further, Section 51 of the said Act states that the Act is to have over riding effect. Section 51 reads as under:
"The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrurnent having effect by virtue of any other law than this Act."
The department does not dispute that the appellant is an SEZ unit. The only contention is that bases on 'information in the system' the goods have originated from EOU."
6. At the time of hearing, the bench raised the query as to why the appellant had paid the duty at the time of export if they were sure that it was export made by SEZ unit. The Ld. Counsel has explained that there was dispute with regard to classification of ilmenite and the duty payable (@5% / 10%) for the processed and unprocessed goods originating from EOU. As per notification 15/2013 dated 1.3.2013, the rate of duty of unprocessed ilmenite is 10% and that of processed ilmenite 5%. In the case of exports from EOU, the department classified the goods under CTH 26060010 unprocessed ilmenite and directly to pay duty at 10%. The appellant had contented that the goods are processed ilmenite and falls under CTH 26140020 attracting 5% duty. The matter travelled upto Tribunal and vide FO.No.41412/2015 dated 14.10.2015, the Tribunal held that the goods being processed / upgraded ilmenite are chargeable to 5% duty. As the present shipping bill had been wrongly presented before Custom house, this dispute of classification was raised by the assessment section demanding duty @ 10%. In order to have the goods exported without delay, the appellant then had opted to pay the duty amount. : a 21 Customs Appeal No.41042 of 2016
7. The Commissioner (Appeals) in last part of para 5 has stated that the adjudicating authority cannot re-assess the shipping bill, when the reassessment has been finalized and completed on. 3.6.2013. The shipping bill was presented without any liability to pay duty. The same is self assessment as per subsection (1) of section 17 of the customs Act, 1962. The appellant was directed to pay duty and it was paid on 3.6.2013. The goods were thereafter exported. Self-assessment itself being an assessment as per law, when the officer directed to pay duty, the same becomes re-assessment as under subsection (4) of section 17. However no speaking order was passed by the officer though the duty was paid under protest. The Commissioner (Appeals) has observed that if aggrieved by the re- assessment dated 3.6.2013, the appellant ought to have filed appeal.
Subsection (5) of section 17 reach as under: -
"Where any re-assessment done under subsection (4) is contrary to the self- assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re- assessment in writing, the proper officer shall pass a speaking order, on the re- assessment, within 15 days from the date of re-assessment of the bill of entry or the shipping bill as the case may be".
8. From the above it can be seen that the officer who passed the re-assessment on 3.6.2013 ought to have passed a speaking order within 15. days when the duty is paid under protest. The appellant ought to filed an appeal upon such order of re-assessment. Instead they have opted to file a refund claim.
) 22 Customs Appeal No.41042 of 2016
9. The 'refund' claim so filed could have been returned to furnish speaking order. Instead, it was rejected stating that there is no re- assessment. The appellant then repeatedly requested for re- assessment. The original authority has thus passed the order of re- assessment holding the reassessment to be made under Section 17 (5). We have to say that on these facts, the appeal stands upon ill founded proceedings. To add to this, the order passed by original authority has been challenged by department filing an appeal against the EOU. The fact of payment of duty under protest is undisputed. The adjudicating authority has called for reports to ensure that the goods originated from SEZ. The procedural infractions as above has resulted in the burden of duty on the appellant. Only to resolve the dispute we hold that the refund has to be allowed.
10. it also requires to be stated that though the appeal is filed by department against the order passed by OIO for reassessment, the Commissioner (Appeals) has gone on a different tangent and held that the request is for amendment of shipping bill which in our view, is error of facts. This issue does not need any further analysis as we have already held that the impugned order suffers from the infirmity of non-joinder of necessary party. In view of peculiar circumstances as explained above, it is made clear, that on the basis of governing facts and attending circumstances, this order is passed against an ill
----
founded proceeding.
23Customs Appeal No.41042 of 2016 ii. From the above, we hold that the impugned order cannot sustain and requires to be set aside which we hereby do. The order passed by original authority (date 30.6.2015) is restored. The appeai is allowed with consequential reliefs, if any.
[F. [zone (Pronounced in court on ) Se pavete vole . U. 7 (cepa Meee (VASA SESHAGIRI RAO) (SULEKHA BEEVI C.S.) Member (Technical) Member (Judicial) ra 24 Customs Appeal No.41042 of 2016 Per Mr. Vasa Seshagiri Rao I have perused the order passed by my learned colleague Ms. Sulekha Beevi C.S., Member (Judicial). I find that the issues involved are significant as there are allegations of procedural infractions against the appellant with regard to export clearances, in as much as SEZ is a specially defined area which is considered to be
- outside Customs purview. If the findings in the impugned order are found incorrect and the appeal succeeds, it may lead to procedural conflicts between various schemes like EOU, SEZ formulated by the Government as underlying principles governing the schemes are different. Hence the issues require a detailed judicious analysis factually, which I propose to do before coming to a conclusion. Hence this separate order.
2.1 The facts emerging from the appeal are as follows:
The Appellant is a SEZ unit located at AMRL SEZ, AMRL International Tech City, Rajakkamanalam Village, Nanguneri Taluk, Tirunelveli District which is a distinct and separate legal entity from the EOU Unit of M/s. V.V.Minerals at Keraikaranthattu, Tisayanvilai, which address serves as the registered office of both the units though PAN and IEC are different. Both units are arising out of the same partnership firm. The SEZ unit has a private bonded warehouse licence No,01/2012 issued on 03.04.2012 by Customs, Tuticorin for PU 25 Customs Appeal No.41042 of 2016 storage of their finished goods Viz. garnet, ilmenite, zircon, rutile and other related mineral consumables, in terms of an agreement entered into. with development Commissioner MEPZ, SEZ. The bonded warehouse licence has been obtained by the Appellant since their unit situated at Nangunerl SEZ is about 90 Kms from Tuticorin Port and since large consignments have to be exported, they appear to have arranged for a separate private bonded warehouse situated near Tuticorin port for storage of their finished goods.
2.2 - The SEZ Rule 46(1) (e) permits the unit to export any _ goods on execution of a bond for the duty involved subject to the condition that the unit shall submit proof of export within a period of 90 days from the removal of such goods under bond. The department of Commerce vide instruction No. 63 in tetter. No. C3/21/2009-SEZ dated 10.08.2010 issued detailed guidelines for removal of product .
from SEZ unit to a bonded warehouse as per which the SEZ unit will file five copies of Yellow Bill of Entry to SEZ Customs with space utilisation/ availability certificate from the Customs 'officer-in-charge of the bonded warehouse. The goods will be moved from the SEZ under cover of the fifth copy of yellow BOE which will be retained by the Customs officer in charge of the bonded warehouse who issues the re-warehousing certificate for the goods warehoused. The re- warehousing certificate will be submitted by the SEZ unit to SEZ Customs and if the SEZ unit fails to submit such re-warehousing certificate within 45 days from the date of clearance of the goods Ge 26 Customs Appeal No.41042 of 2016 from the Zone, the SEZ customs shall initiate appropriate action to realise the duty and interest on the goods in question.
2.3 The present issue revolves around the export of processed Ilmenite under the cover of shipping bill no. 5673479 dated 29.05.2013 filed by the Appellant who is a an SEZ unit self- assessed under Section 17(1) of Customs Act, 1962 before Custom | House, Tuticorin. Their EQU Unit was also regularly effecting exports of processed Ilmenite falling under CTH 26140020, to the same buyer on payment of Customs Duty @ 10%. By virtue of Notification No. 27/2011-Cus dated 01.03.2011 -as amended by Notification no.15/2013-Customs dated 01.05.2013, the unprocessed ilmenite was to be classified under CTH 26140010 and prescribed export duty was 10% whereas the processed Ilmenite was. subjected to export | duty of 5%. In respect of the exports made by the EOU unit, the nature of ilmenite being exported whether fully processed or not and _ the applicable rate of export duty was the subject matter of dispute between the Customs department and the EOU unit. While the EOU claimed classification under CTH 26140020, the department sought to classify the exported ilmenite under CTH 26140010. This issue was settled in favour of the EOU Unit only in the year 2015 vide Tribunal's Order dated 14.10.2015.
2/ Customs Appeal No.4104? of 2016 2.4 The Appellant claimed that the impugned export goods had originated from SEZ Unit and claimed Nil rate of duty whereas the proper officer of Customs was not satisfied with the documents filed, to prove beyond doubt that the goods originated from the SEZ. The proper officer verified the self-assessment and re-assessed the Bill under Section 17(4) of Customs Act, 1962 on 03.06.2013 and directed the exporter to pay appropriate export duty @10% as applicable for the export consignment of processed itmenite from EQU unit. The proper officer of Customs further advised the appellant that the Shipping Bill be filed at SEZ for assessment to avail exemption or else pay applicable Customs duty for clearance of the consignment by Custom House, Tuticorin. The exporter preferred not to file the Bill at SEZ and instead opted for payment of the Customs duty of Rs.90,48,243/- under protest and on such reassessment under Section 17(4) of the Customs Act, 1962 Let Export Order was given on 06.06.2013. Instead of filing an appeal before the Appellate authority against the order of reassessment as above, the Appellant . filed a refund claim for the duty paid under protest. The refund claim was rejected by the department as not maintainable on the ground ; that the subject reassessment was not reviewed and/or modified in an appeal under the Customs Act, 1962. Thereafter the Appellant requested again for re-assessment and the Assistant Commissioner of Customs vide Order-in-Original No. 1356/2015 dated 30.06.2015 ordered for re-assessment of the Shipping Bill which was already reassessed extending the benefit of 'Nil' rate of duty available to the i 28 Customs Appeal No.41.042 of 2016 SEZ under the provisions of the SEZ Act, 2005, thereby holding the Appellant as eligible for refund of Customs duty paid under protest.
2.5 Being aggrieved, the Department filed an appeal against the above order dated 30.06.2015 before the Commissioner (Appeals) contending that the Appellant was not eligible for any exemption made available under Rule 26(1)(b) of SEZ Act 2005 as a SEZ Unit as verification of documents and examination of impugned 'export goods during assessment of the impugned Bill revealed that the cargo is that of 100% EOU only. After due process of law, the Commissioner( Appeals) vide Order-in Appeal no.39/2016 - TTN(Cus)(D) dated 09.03.2016 set aside the Order-in-Origina! on the ground that the order was passed patently without jurisdiction and devoid of any legal authority. Aggrieved by the impugned order of Commissioner. (Appeals), the Appellant, filed the present appeal before this forum.
3. ' Since the written and oral submissions made by the rival parties and their representatives have already been mentioned in the order of the learned Member (Judicial), I am not repeating the same. The averments shall be separately considered in the relevant part of the discussion below. The following issues arise for consideration in the appeal:
Spa itl.29
Customs Appeal No.41042 of 2016 Whether filing of the Shipping Bill No. 5673479 dated 29.05.2013 by the Appellant SEZ unit on Ice Gate Portal instead of SEZ Online Portal is in accordance with the Customs Law ~ and procedures? Whether Customs Assessing Authority can extend or not the exemption from payment of Customs duty in respect of any SEZ unit filing the export documents with the Customs and not in the SEZ as mandated in Rule 46 of SEZ Act?
Whether rejection of the refund claim filed by the Appellant by the Customs is legal or not?
Whether the Order-in-Original No. 1356/2015 dated 30.06.2015 of the Assistant Commissioner --
of Customs (Export) in reassessing the export covered under the Shipping Bill No. 5673476 dated 29.05.2013 of the Appellant extending the exemption of SEZ goods is legal or justified in the facts of this case?30
Customs Appeal No.41042 of 2016
4.1.1 It is important first to examine, Rule 46 of the SEZ, 2005 which lays down the procedure for export as mentioned below:-
"46. Procedure for Export. -
(1) The procedure for export from Special Economic Zone through seaports or airports or Inland Container Depot or Container Freight Station or Land Customs Station or by Post or by Courier or by Personal Carriage, as the case may be, shall be as under: - (a) the Unit shall file Shipping Bill, in quadruplicate, with the Authorized. Officer of Customs in the Special Economic Zone together with relevant documents, namely, invoice, packing list and Currency Declaration Form (GR) (in duplicate)
(b) the Shipping Bill shall be registered, assigned a running serial number and assessed by the Authorized Officer in the manner and procedure as is followed in case of exports under free 'shipping bill without any requirement of the counter signature;
(c) the goods shall not be subjected to routine examination and 'Let Export Order' shall be given on the basis of self- certification by the Unit.
Provided that qoods may be sealed after examination, as per the norms prescribed for free shipping bills, at the option of the Unit, by the Authorized Officer.
Explanation.- "Self certification". means the certification regarding sealing of container or package of goods under export given by the Unit and includes the certificate regarding contents and sealing of the container or package given by the owner or the working partner or the Managing Director or the Company Secretary of the said Unit or any person authorized in this behalf by the owner or company or working partner, as the case may be, on the copies of Shipping Bill stating that the package or container in respect of goods under export have been sealed in his presence;
(d) the goods may be examined at the port, airport Inland Container Depot or Container Freight Station or Land Customs Station only in case of specific intelligence or information after obtaining the written permission of Deputy or Assistant Commissioner of Customs having jurisdiction over the said port, airport, Inland Container Depot or Container Freight Ie 31 Customs Appeal No.41042 of 2016 Station or Land Customs Station, as the case may be, in writing;
(e) the Unit may export through Inland Container Depot located in the Special Economic Zone, or through any port or airport or Inland Container Depot:
Provided that in case of export of large quantities of cargo where it may not be possible to ship the cargo from the Special! Economic Zone in one consignment, the Specified Officer may allow the export of such cargo on execution of a Bond for the duty involved subject to the condition that the Unit shall submit the proof of export within ninety days of removal of such cargo under Bond, failing which applicable duty on the goods not exported shall be payable in terms of the bond"
4.1.2 Section 26 of Special Economic Zone Act,2005 reads as under;
"Exemptions, drawbacks and concessions to every Developer and entrepreneur--
(1) Subject to the provisions of sub-section (2), every Developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions, namely:--
(a) exemption from any duty of customs, under the Customs Act, 1962 (52 of 1962) or the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force, on goods imported into, or service provided in, a Special Economic Zone or a Unit, to carry on the authorised operations by the Developer or entrepreneur;
(b) exemption from any duty of customs, under the Customs Act, 1962 (52 of 1962) or the Customs Tariff_Act, 1975 (51 of 1975) or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to_ any place outside India;"
4.1.3. It is important to note that Ice Gate is the national porta! of Indian Customs that provides e-filing services to the trade, cargo carriers and other trading partners electronically for both import and an 32 Customs Appeal No.41042 of 2016 export for filing of Bills of Entry as well as Shipping Bills. Likewise, SEZ online is a total integrated solution to facilitate speedy processing of various transactions either import or export. Necessary documents are required to be filed on SEZ online portal in respect of | SEZ cargo.
4.1.4 I find that the address of the exporter has been _ mentioned in the Shipping Bill No. 5673479 dated 29.05.2013 as that of the SEZ Unit of V.V. Minerals. The exporter who ought to have filed _ the Bill with the proper Officer at SEZ as per Rules ibid to avail export
-benefits of Nil rate of Customs duty under Section 26(1)(b) of SEZ Act, 2005, have opted to file the Shipping Bill with Customs Tuticorin for reasons best known only to them and suffered unpleasant - _ consequences for such action for which the blame is to be borne by the Appellant. Therefore, I have no hesitation to hold that the filing of Shipping Bil! with Customs Authorities as a SEZ unit for SEZ cargo is not legal and proper.
4.2 Further, I find from appeal records that the Assessing Authority insisted on the Appellant, either for assessment at SEZ to 7 claim Nil rate of duty or payment of applicable export duty in respect of the Shipping Bill filed for SEZ cargo, as he had entertained reasonable belief that the documents filed were deficient to prove beyond reasonable doubt that the impugned consignment pertained ae 33 Customs Appeal! No.41042 of 2016 to SEZ. Moreover, M/s. V.V. Minerals, EOU was also regularly clearing export consignments of the same commodity processed ilmenite through Customs, Tuticorin upon payment of applicable export duty. In this context filing shipping Bill under self-assessment by declaring goods to be of SEZ origin and claiming 'Nil' rate of duty raised reasonable suspicion in the mind of the assessing officer. Since the Appellant had preferred assessment by Customs Tuticorin and as the documents filed were inadequate as to the origin, the officers were, on a reasonable belief that the export consignment pertained to EOU, insisted on payment of applicable export duty which was paid under protest by the Appellant herein. The Appellant has failed to satisfy the Customs authorities that the subject goods were removed under bond from SEZ and then was brought for export within the 90 days' time stipulated under Rule 46(1)(e) of SEZ. The payment of duty under protest could also be on account of already existing dispute of classification of ilmenite between the EOU Unit and the department. I find that the CTH declared in the Shipping Bill was under 26140020 attracting 5% duty as ilmenite whereas the department classified the same under CTH 26140010 attracting export duty @10%, resulting in payment of duty under protest as identical product being exported by their EOU unit was pending finality as to its classification. In this regard, it is pertinent to mention that the Appellant had the option of availing exemption by filing the Bill with the proper officer of SEZ but chose to get the export consignment assessed with the Customs House. This clearly indicated that the Appellant was reluctant to file aaa 34 Customs Appeal No.41042 of 2016
-the bill at SEZ or prove beyond doubt that the goods had been originated from SEZ. As such, action taken by the Customs Authority by reassessing the Shipping Bill filed by the Appellant SEZ unit at the time of exportation demanding duty @ 10% was proper and valid. Had the exporter opted for assessment by the proper officer of SEZ by filing documents on SEZ online portal, the duty liability may not have arisen at all. The fact that the exporter had discharged the export duty, even though under protest preferring to finalise the assessment at Custom House Tuticorin, conveyed the impression that the export consignment must not be beloging to the SEZ unit but the EOQU Unit. The duty payment under protest, appears to be due to "existing classification dispute involving EOU goods rather than the purported clearances of export consignment by the SEZ Unit through Custom House Tuticorin. In the backdrop of the above discussions, I am inclined to hold that the assessment made by the department was proper and valid.
5.1 ; Refund: I find that the. Appellant's refund claim was rejected as not maintainable on the ground that the order of assessment has not been reviewed or modified in any appeal by the competent authority. It has to be noted that the Shipping Bill was reassessed under Section 17(4) of the Customs Act, 1962 on 06.06.2013 whereas the refund claim was filed by the Appellant on 21.02.2014 i.e, after elapsing a period of more than three Months during which the Appellant could have approached the Commissioner pe 35 Customs Appeal No.41042 of 2016 of Customs (Appeals) which he had failed to do. While rejecting the refund claim, reliance was placed on the judgement in the case of Priya Blue Industries Vs. Commissioner of Customs [2004 (172) ELT | 145 (SC)]. In the case of Priya Blue Industries Vs. Commissioner of Customs, Ahmedabad reported in [2002 (148) ELT 809 (Tri-Del.)] it was held as follows:-
"4. At the outset, a preliminary objection was raised as to whether the appeals are maintainable or not. It was submitted that a refund claim is not maintainable when assessment of Bill of Entry is not challenged by filing an appeal against it. It was contended before us that the very same issue came up before the Tribunal _ in the case of Kopran Ltd. v. C.C., New Delhi reported in 2002 (141) E.L.T. 694 (T} = 2002 (50) RLT 286 in which this Tribunal held as under :
"4. We have considered the submissions of both the sides. It is not in dispute that the benefit of Notification No. 11/97 was not claimed by the appellants at -the time of filing of Bill of Entry. The 'assessment ordered by the Department on the Bill of Entry has also not been challenged by them. In view of the Tribunal's decision in the cases of Khemka Travels and Hari & Co. order of assessment on a Bill of Entry is an appealable order against which appeal is required to be filed if a party is aggrieved by the same. As no appeal has been filed the appellants cannot claim refund as held by the Supreme Court in the case of Flock India Ltd. reported in 2000 (40) RLT 131 (S.C.). We, therefore, reject the appeal filed by the appellants on this ground without going into the ' merits of the matter."
5. We find in the instant case that assessments were finalised on the Bill of Entry but no appeals against these assessments were preferred. We note that preliminary objection is sustainable in view of the ratio of the judgment of this Tribunal in the case of Kopran Ltd. Accordingly, we hold that the appeals are not maintainable. The same are, therefore, dismissed."
36Customs Appeal No.41042 of 2016 The above judgement has been affirmed by the Hon'bie Supreme Court as mentioned above, which has been relied upon while 'rejecting the refund claim in the present case.
5.2 | Per Contra, I find that the lower authority has relied on the judgement in Commissioner of Customs, Central Excise & Service Tax, Guntur Vs. Fairway Trading Company Pvt. Ltd. [2014 (304) ELT 286-CESTAT Bangalore)] in which the issue involved was related to payment of duty at higher rate and is so distinguishable from the | facts of the present case which deals with goods of EOQU/ SEZ. Similarly, the judgement in the case of Luminous Power Technologies Pvt. | Ltd. Vs. Commissioner of Customs, New Delhi reported in [2013 (287) 'ELT 350 (Tri.-Del)] relied by the lower authority is also distinguishable as the facts involved are different. In the present case, it is observed that at the time of filing of Shipping Bill, appellants were asked to pay export duty and the appellant then informed the department that they are not liable to pay the duty in the normal course and only to have the goods cleared they have paid _ the duty marking their protest. Thereafter refund claim was filed. The | department did not initiate any proceedings by issuing SCN even though respondent marked their protest while paying export duty. The marking of protest itself gives information to the department that there is a requirement for re-assessment, Assessment under Section 17 of Customs Act, 1962 cannot be said to be finalized when Gu.
37Customs Appeal No.41042 of 2016 'respondent has marked the protest while paying duty. In case, respondents had paid the entire duty without any mark of protest, in order to claim refund they have to request for reassessment of Bill of Entry. The mark of protest is an information to the department that the respondent is not making payment of duty voluntarily and then department has to initiate proceedings to vacate protest and pass a speaking order for reassessment as held in Commissioner of Customs, Tuticorin Vs. Sakthi. Sugars Ltd. reported in [2020 (372) ELT 577 (Tri.-Chennai)]. However, the Department placed reliance on the judgement of the Hon'ble Supreme Court in the case of Priya Blue Industriés cited supra and therefore I find no infirmity in rejecting the refund claim on duty paid under protest though the Department had not vacated the protest nor issued a speaking order for re-assessment.
5.3 Regarding the eligibility of refund claim, I find from appeal records, that vide letter dated 03.06.2013, the appellant had informed the Department that they have filed the Shipping Bill under CTH 26140020 as ilmenite processed and was paying duty under protest. It could be inferred that payment of duty under protest was on account of dispute for classification of the ilmenite being exported. Hence, it is implied that there is nothing on dispute about the origin of goods being that of SEZ or EOU only and that the impugned export consignment pertained to EQU for which the duty payment was made fe 38 Customs Appeal No.41042 of 2016 under protest. It is pertinent to note here that the refund claim was filed on 27.02.2014 well after a period of three months available for filing appeal before the Commissioner (Appeals) seeking re- assessment. In view of the above discussions and judicial precedents, rejection of refund claim is legal and_justified.
5.4 Regarding 3(iii) above, I find that the impugned Order- in-Original is not a re-assessment order involving classification, ~ valuation, etc. but amounts to post-shipment amendment and change. of scheme from EQU to SEZ which power can only be exercised by the Commissioner of Customs as per Boards Circular No. 04/2004-cus dated 16.01.2004. The adjudicating authority viz., Assistant Commissioner (Exports) does not have any power to amend the shipping bill beyond Let Export Order and extend the benefit of Nil rate of export duty and to decide the origin of the cargo based on documents which were not produced at the. time of export which is contrary to the provisions of Section 149 of Customs Act, 1962 as per which, no amendment of shipping bill could be done other than the goods exported, except on the basis of the documentary evidence available at the time of clearance for export. The impugned order has ordered for the amendment of the shipping bill by extending the benefits of SEZ Rules based on documents produced by the exporter at a later date proving the origin of the cargo. As the said documents were not available during export of the cargo, the same could not be correlated with the cargo exported. Apart from the factual position, it Cpe 39 Customs Appeal No.41042 of 2016 is observed that such amendment power vests with the Additional Commissioner of Customs and the Assistant Commissioner has no jurisdiction to issue an amendment order. Moreover, the impugned order failed to consider the examination report appearing on the system "that the cargo is 100% EOQU". Hence the impugned Order-in- Original is void ab-initio as the said order has been issued in violation of Section 149 of Customs Act, 1962 and Boards Circular ibid.
5.5 | Further, it is observed that since the appeal involved issue regarding the origin of the goods i.e, whether EOQU or SEZ origin, the address of the registered office which is common to both EQU/SEZ has been mentioned by the department in filing the appeal. Mere non-mentioning of the address of the SEZ unit on the appeal does not exclude. them from the purview of the appeal as the main issue revolved around the SEZ Unit and hence the SEZ unit is also a party to the appeal. I find that the impugned OIA has been addressed to both the units separately and hence mere non-mentioning the address of the SEZ unit in the departmental appeal is not a valid ground to dispute the impugned OIA in as much as the appeal was against the impugned OJO for which the SEZ unit is the main party. A scrutiny of the appeal papers reveal that the SEZ unit vide its letter dated 08.02.2016 has prayed for upholding the Order-in-Original dated 30.06.2015 of the Assistant Commissioner of Customs (Export), for refund of export duty paid and to grant exemption in-
terms of Section 26(1)(b) of SEZ Act, 2005. Prior to this, the Ru 40 Customs Appeal No.41042 of 2016 Appellant has filed cross objections vide its Letter No. C24/01/2015- TIN (Cus) dated 16.10.2015. Mr. I. Nixon, Assistant Manager representing the Appellant has attended the personal hearing on 08.02.2016 granted by the Commissioner of Customs (Appeals). These cross objections filed and prayer have been considered by the ~ lower Appellate authority while passing the impugned order. Hence the department is justified in filing the appeal mentioning the registered address of the SEZ which Is also the address of the EOQU and the Commissioner (Appeals) was justified in entertaining the appeals as the SEZ unit had filed cross-objections during the course of appeal proceedings which were considered before passing the impugned order-in-appeal and hence the impugned order was issued after due process of law and is legal and proper.
5.6 I find that the case laws cited by the Appellant do not 'support their cause considering the factual circumstances of the present case.
6. I now summarise my findings on the issues of fact and law arising in this appeal: -
(i) In view of the discussions at Para 4(1) above, I have no hesitation to hold that the filing of Shipping Bill with Customs Authorities, Tuticorin for export of SEZ cargo is not in accordance with the prescribed procedure. I hold ca
(ii) 41 Customs Appeal No.41042 of 2016 that Customs Authority cannot grant duty exemption for SEZ cargo.
The self-assessed Shipping Bill for export of cargo by the Appellant. SEZ unit was reassessed by the Customs Assessing Officer in terms of Section 17(4) of the Customs Act, 1962. The above Shipping Bill having been reassessed by the Customs Assessing Authority under Section 17(4) of the Customs Act, 1962 as EOU cargo. Reassessment of the reassessed Shipping _ Bill No. 5673479 dated 29.05.2013 of the appellant by the Assistant Commissioner of Customs (Export) in the Order-in-Original No. 1356/2015 dated 30.06.2015 cannot be termed as legal and such an order passed belatedly in terms of Section 17(5) of the Customs Act, 1962 is not in terms of valid exercise of the powers vested in him. The correct course for the appellant against the reassessment of the Customs Authorities of the cargo as pertaining to EOU under Section 17(4) of the Customs Act, 1962, would have been to file an ' appeal before the Commissioner of Customs (Appeals) within three Months from the relevant date.
ae 4?
Customs Appeal No.41042 of 2016
(iii) Thus, the impugned Order-in-Original No. 1356/2015 dated 30.06.2015 does not call for any interference and has to be held as fegal and proper.
7. Based on the above discussions, I find myself unable to accede/concur with the views of the Ld. Member (Judicial).
8. iy hereby dismiss the appeal filed by the Appellant and uphold the impugned Order-in-Appeal No. 39/2016 dated 09.03.2016 passed by the Commissioner of Customs (Appeals) as above.
As such, the appeal is dismissed.
(VASA SESHAGIRI RAO) MEMBER (TECHNICAL) 43 Customs Appeal No.41042 of 2016 DIFFERENCE OF OPINION In view of the difference of opinion between the Members, the following point of difference is framed for resolution :-
Whether the appellant is eligible for refund and appeal is to be allowed by setting aside the impugned order as held by Member (Judicial) ?
Or Whether the appellant is not eligible for refund and appeal is to be dismissed by upholding the impugned order as held by Member (Technical) ?
{H.|-BOrte (Pronounced in court on ) (VASA SESHAGIRI RAO) (SULEKHA BEEVI C.S.) MEMBER (TECHNICAL) - MEMBER (JUDICIAL) MK -
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CHENNAI SOUTH ZONAL BENCH, CHENNAI Customs Appeal No. 41042 of 2016 (Arising out of Order-in-Appeal No. 39/2016 dated 09/03/2016 passed by Commr. of Customs, C. Ex. (Appeals-II), Tiruchirappalli) M/s Vetrivel Minerals (V. V. Minerals) (Branch: 424-416, AMRL SEZ, AMRL International Tech City Rajakkamangalam Village, Nanguneri Taluk, Tirunelveli District-627108) Appeilant VERSUS Commr. of Customs, Tuticorin (Customs House, New Harbour Estate, Tuticorin-628004) _ Respondent APPEARANCE :
Mr. Ramamurthy, Advocate for the Appellant Mr. Rajaram (Asst. Commissioner), Authorized Representative For the Respondent CORAM:
HON'BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL) INTERIM ORDER NO..402.9.2292-9 Date of Hearing :_ 14' March 2024 Date of Pronouncement: QI. 03. Dene PER R. MURALIDHAR:
The Appellant herein is a Special Economic Zone Unit (SEZ Unit) duly approved by the Development Commissioner, which is situated at 424-416,. AMRL SEZ, AMRL- International Tech City, Rajakkamangalam Village, Nunguneri, Tirunelveli District. They also have another EOU Unit which is situated at IZC Keeraikaranthattu, Thiziyenvilai, Tirunelveli. From both these units, they have been exporting Ilmenite upgraded (processed) falling under CTH 26140020. The Appellants have exported one consignment from their SEZ Unit under Shipping Bill No. 5673479 dated 29/05/2013 and sent to Tuticorin Port along with copies of Shipping Bill and ARE-1. They claimed that no Export Duty is required to be paid since they are SEZ Unit. However,
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Customs Appeal No. 41042 of 2016 as per the directions of the Tuticorin Customs Officials, they have paid Rs. 90,83,243/- as export duty "under protest". Subsequently, they have filed a refund claim for refund of Rs. 90,83,243/-. Their refund claim was rejected. on the ground that without filing any Appeal before the Commissioner (Appeals) against the re-assessed Shipping Bill, they have directly filed the refund claim. For taking this view, the Adjudicating Authority has relied on the case law of M/s. Priya Blue Industries Ltd. Vs. Commissioner of Customs (Preventive) [2004 (172) ELT 145 (S.C.)j. The Appellants then approached the Adjudicating Authority to re-assess the Shipping Bill since they had paid the export duty 'under protest'. The Adjudicating Authority after causing necessary verification, vide OIO No. 1356/2015 dated 30/6/2015 held that the export has actually been undertaken by SEZ unit and accordingly, he has vacated the protest and held that the Appeliant is eligible for refund. Being aggrieved, the Revenue filed an Appeal before the Commissioner (Appeals). The Commissioner (Appeals) has overturned the Adjudicating Authority's OIO on several grounds. Being aggrieved, the Appellant is before the Tribunal.
2. After hearing the case from both the sides, the Tribunal has passed an Interim Order on 17/01/2024 wherein a Difference of Opinion has arisen.
The point of difference of under this Interim Order is as under:-
(a) Whether the Appellant is eligible for refund and appeal! is to be allowed by setting aside the impugned order as held by Member (Judicial)? | | Or
(b) Whether the Appellant is not eligible for refund and Appeal is to be dismissed by upholding the impugned order as held by Member (Technical)? |
3. Today I have taken up the Difference of Opinion matter for Hearing in the presence of both the sides. After an extensive Hearing, I am summarizing below the submissions made by both the sides:-
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Customs Appeal No. 41042 of 2016 4, The Learned Counsel, Sri Ramamurthy on behalf of the Appellant makes the following submissions: -
(i) He submits that the Review Order passed by the Commissioner (Appeals) against the OIO is erroneous since he has proceeded on the assumption that the export was carried out by EOU Unit and not carried out by the SEZ unit. The Advocate took me through the various documentary evidence in the form of Shipping Bill, ARE-1, Invoice details, etc. to show that the actual exporter was SEZ unit only. He submits that the Review Order and the Revenue's Appeal! before Commissioner (Appeals) have made the EOU as the Respondent and SEZ is not the Respondent. As a matter of abundant precaution, the SEZ unit had filed their Cross Objection before the Commissioner (Appeals) and then their representative appeared for the PH and made all their submissions. He also points out that though it is recorded in the OIA that.
the person from SEZ has attended the PH, none of the points raised by the SEZ Unit have been addressed in the OIA passed by the Commissioner (Appeals). He prays that the entire proceeding is to be treated as non est since the SEZ Unit was not made Respondent in the Appeal nor their points were considered and nor any speaking Order was passed on the points raised by them by the Commissioner (Appeals).
(ii) He submits that the Review Order dated 28.08.2015 passed by the Commissioner speaks of the option being given to the Appellant to either carry on the export as SEZ unit by filing the required documents before the proper SEZ Customs authorities or clear the goods as EOQU from Tuticorin Port on payment of Export Duty [Para 21 of the RO]. Such an option was never given in writing as has been claimed in Review Order. He submits that even prior to the consignment in question, they have been regularly clearing their SEZ goods for exports through Tuticorin Customs Port without filing these documents before the SEZ Customs officials. Towards this, he has taken me through the letter dated LA 4 Customs Appeal No. 41042 of 2016 26/08/2015 (Page No. 93 of Appeal Book) addressed by the SEZ unit to the Assistant Commissioner-Exports, giving the details of exports completed by SEZ unit through Tuticorin Port Customs in the normal course without resorting to filing all the documents before the SEZ Customs officials. .
(iii) He submits that no Speaking Order was passed by the Customs officials by re-assessing the NIL Export Duty to 10% Export Duty to be paid in terms of Section 17(4) and 17(5) of the Customs Act, 1962. Therefore, they had no option to go before the Commissioner (Appeals) to file any Appeal in the absence of such an Order. Hence, he justifies their approaching the Adjudicating Authority to vacate 'under protest' payment made by them. He submits that they have taken the correct legal route and Adjudicating Authority was correct in treating this as a case requiring re-assessment in terms of Section 17(5). He points out that the Commissioner (Appeals) proceeded on an_ erroneous presumption that this is the case of amendment in terms of Section 149 of the Customs Act, 1962. | {iv) Based on all the above submissions, he prays that the Appeal may be allowed.
5, The Learned AR, Sri Rajaram submits that the Appellant was not in a position to prove clearly that the goods in question belong to SEZ unit. He submits that due to the pressure from the Appellant for quick clearance of the export goods, probably no option would have been given in writing by the Tuticorin Customs Authorities. But as a matter of fact, option was given to them orally to either clear the goods by paying the export duty or by filing the documents before the proper SEZ authorities if they want to claim the Nil rate of Export Duty. He further submits that the oral order of the Customs official to pay the export duty would amount to re-assessment. The appellant's payment of Export Duty would amount to the admittance that EOU unit is the exporter. Therefore, once A 5 Customs Appeal No. 41042 of 2016 the re-assessment was done at the end of the Customs side, the Appellant was required to file the Appeal before the Commissioner (Appeals) before approaching for any refund of the said amount. In this case, the time limit to file appeal before the Commissioner (Appeals) was also exceeded. He submits that only because of this reason, the Appellant has resorted to directly approaching the Adjudicating Authority for vacating the protest. This actually amounts to re-assessment of re- assessment, which is not permissible. In view of these submissions, he submits that the appeal is liable to be dismissed.
6. In this case there is no dispute in respect of the following point:
(a) If the exports are carried out by SEZ, no Export Duty is required to be paid, irrespective of the classification of the goods exported.
(b) If the exports are carried out by EOU, Export Duty is required to be paid. The rate of Export Duty wouid be either 5% or 10% depending on the classification of the goods exported.
7. The refund, if any, would. entirely depend on the outcome of a proper conclusion of the above issue. If it is proved that SEZ has. undertaken the export, the refund of the entire Export Duty would accrue to them. On the other hand, if the export is undertaken by the EOU unit, they would be eligible for refund of 5% or NIL/no refund, depending on the classification of goods exported.
8. Therefore, it would be crucial to ascertain without any ambiguity as to who has exported the goods in question. There are two divergent claims:
(a) As per the appellant, the exports have been carried by the SEZ unit.
LA 6 Customs Appeal No. 41042 of 2016 (Db) As per the Revenue, the exports have been carried out by the EOU unit.
9, I have taken up for examination the documents used by the exporter, at the time of exports. From the records, it is seen that they have filed the following documents: .
(i) Shipping Bill No. 5673479 dated 29.05.2013
(ii) ARE 1 No. 01/13-14 dated 05.06.2013
(iii) Invoice No. SEZ 1/2013-14 dated 28.5.201310.
10. For the convenience of ready reference, the Shipping Bill and the ARE 1, Invoice and Export Duty Challan are reproduced below:
7Customs Appeal No. 41042 of 2016 im pa Ebr ee cree i etes Bee ee?
a fe Ape tat eine ares Eh Blame ee TR oR Le Ping gah Ee 8 Customs Appeal No. 41042 of 2016 aS aa! BYiye toes sci 9 Customs Appeal No. 41042 of 2016 es ae 4 hae a in, Aes ince ni oS wie eae Se ea eny 2:
ok ate! ee aS Ean ee ferns 10 Customs Appeal No. 41042 of 2016 TavOKCE NO. & OATE _ +, Jexroayaies ais. : " Ager yyabi314 Jot 28.08. 2013 Ts : IEC FSOSOGZ0RS -
RS apes NO, BATE (LSB NO:
. BONG: i 08-2013 te . ome era a fgg [oniromeii coast oe as R/S. TIORIDE: TMALAYSIAD SDN, LBHD., "ete : TKAWASAN PERINDUSTRIAN TELUK RALING, a eg JPETI SURAT 28, BAOO7KEMAMAN os,» {TERENGGANU, MALAYSIA... oS Se feotisrer er, onc of GodDS |coulrey oF EINAL x OND oN og oa DIA ca ps ee "MALAYSIA.
TERMS OF DELIVERY, AND PAVMGNT Sy _ PRESENT THROUGH | - = wot. Je [BANK OF WESTERN AUSTRALIA LT, _ _YurcoRy 108, ST.GEORGES TCE, Ce i CRINANOT So ny NO. at RIND OF FKGS, DESCRITION OF GOODS - Te : 'Quay | GARE.) AWOUN mc a MONS TU power | TOTAL ' ms ee ee 7: ae IN BULK 1GMENITE UPGRADED | e780. wo | 467125 (UPGRADED} ; ee BLILK SHIPMENT .
1s, Lh - ; * 4 eee ergo PL totes i : siocMimateny he 'ag a Beda wmnuneres 1 TOTAL. = | 36712 SIGNATURES & ZOATE ear "11 Customs Appeal No. 41042 of 2016 i, ee ee Customs Appeal No. 41042 of 2016 12 peal : ey Rees Bees ara id ae ae iN: 1} Dated 26h fan, 2001 issue der Rae i et Cental Extise Wo2) mist Bays 13 Customs Appeal No. 41042 of 2016 Pane: CER ee cagoerlist oc fomiddeto be wae.
oe ier two setierot % oe ; the omainer was 7 Certified that the aboventeatigned con eng ; original ennicidion unde: Bilt OFExports: No. <) Refund Ord 14 Customs Appeal No. 41042 of 2016 i1. A careful observation of these documents would show that :
(a)
(b)
(c)
(h)
(i) The Shipping Bill gives the full details of Name and Address of the SEZ Unit The Shipping Bill specifies the Invoice Number as : SEZ 1/2013-
14 dated 28.5.2013 | The Shipping Bill states that 'Consignment was not opened for physical examination by Customs' and has necessary endorsement of the Customs officials and Let Export Order has been given on 07/06/2013. .
ARE 1 has a bold pre-printed word 'SEZ EXPORTS'.
ARE 1 at column 1 gives the details of the SEZ License Number. ARE 1 shows NIL Rate of Duty and Amount of Duty with the remarks 'SEZ - NA' ARE 1 SI No. 4 states that "the export is in discharge of export obligation under SEZ Scheme". It is signed by Authorized Signatory of V. V. Minerals SEZ. | At the back page of ARE 1, Part A is filled up and signed by the Superintendent of Central Excise City Range.
Part 'B' of the ARE 1 is filled up with the details of Shipping Bill No. 5673479 and gives the details of Aircraft/Ship details and states that Cargo was exported on 6" day of 6" Month of 2013 (6.6.2013) and is signed by Inspector & Superintendent of Customs.
12. The exporter has provided/filled up (a), (b), (d) (e) (f) and (g) above, _ to the effect that the export is carried out by the SEZ Unit.
13. Further the exporter has paid the Export Duty of Rs.90,83,243/- showing that the same is paid by V V Minerals Nanganalur, which is the address of the SEZ unit. For this, Challan No. 56290 dated 03/06/2012 is
- attached [Page 129 of the Appeal Book.] 15 Customs Appeal No. 41042 of 2016
14. These are the documentary evidence brought in by the exporter towards their claim that SEZ is exporting the goods.
15. From the Revenue's side, it is claimed that :
¢i) The appellant was given a choice to opt for SEZ transaction by filing the documents with the concerned SEZ customs officials ; or
(ii) To Pay the Export Duty and clear the goods for export
(iii) In spite of such option provided to the exporter, he chose to pay . the Export Duty, since the appellants were not sure as to whether the SEZ was the exporter or EOU was the Exporter.
16. Based on 15 (iii) above, all the subsequent proceedings have been conducted. |
17.. My specific observations are as under :
(i) While the record/evidence is available in respect of the | documents submitted by the exporter, no documentary evidence is "provided the effect of [15(i}] above by the Revenue at any point of time, not even at the time of the Hearings before the Tribunal. On my query during the Hearing, the appellant pointed out to relevant portion of the Review Order dated 28.08.2015, wherein it is stated at Para 2.1 that "As such the proper officer insisted on payment of applicable duty or else advised them to file the Shipping Bill with respective SEZ, if they want to avail exemption. The exporter instead of filing Shipping Bill at SEZ paid duty under protest probably because they could not establish that the goods were of SEZ origin". The appellant submitted that even in the pA 16 _ Customs Appeal No. 41042 of 2016 Review Order there is no reference to any documentary evidence towards the option given.
(ii) _ Secondly, in respect of the documents provided by the exporter, as can be observed from the Shipping Bill [11(c) above], it is endorsed by the Customs Officials and ARE 1 [(11(h)] is again endorsed by the Customs Officials towards the Let exports and details of the container / ship by which the exports have taken place have been given.
(iii) Revenue takes the stand that Export Duty is to be paid if the goods are exported by EQU. As per Revenue the Export Duty has been paid and hence it is to be taken that only EOU has exported the goods.
In that case how and why the Shipping Bill and the ARE1 were endorsed by Tuticorin Customs officials when these documents carried the details of the SEZ unit and not that of the EOU unit? As these are crucial documents to prove as to who exported the goods, if the Revenue was of the opinion that only EOQU was the exporter then they should have got these documents changed/amended to the effect that the export is carried out by the EOU. Non taking of these important steps would amount to the Customs endorsing the exporter's claim that the export has been carried out by the SEZ unit. The endorsement _ by Customs officials in the Shipping Bill and ARE-1, in fact clarifies that they have allowed the SEZ unit to export the goods.
(iv) The mere payment of Export Duty, per se [i.e 15(iii) above], on its own cannot lead to a conclusion that EOU is the exporter when corroborative evidence is completely absent and as a matter of fact supports the appellant's stand. The fact that the exporter has not paid the Export Duty in the normal course, but 'Under Protest' [albeit in a different context], makes it even more difficult for the Revenue to stand by its assertion.
17Customs Appeal No. 41042 of 2016
(v) The SEZ unit is located at AMRL Tech City, Rajakkamangalam, Nunguneri, Tirunelveli and the EOU Unit is located at Keeraikaranthattu, Thiziyenvilai-627657. Therefore, if the Revenue had made efforts to check the Consignment Note [Lorry Receipt], GTA details etc as to from where the goods were despatched, and if it was found to have emanated from EQOU unit, this would have served as a proper corroborative evidence for the Revenue's side. I have put up this specific query during the Hearing and was given to understand that no such details are availabie with the Revenue on this issue.
(vi) When the documents at Para 11 (a) to (h) above pertaining to the exporter's claim are viewed vis-a-vis Para 15(i) to 15(iii) of the _Revenue's claim, it would show that Revenue''s claim has no legs to stand on.
(vil) Now Iam taking up some more important points on this issue :
(A) It is observed from Para 11 (c) above Shipping Bill has the remarks that 'No Physical examination was carried out', whereas the Review Order states "Here it is to.be noted that proper officer viz., examination officer at the time of export who has seen the consignment physically and also scrutinized the documents had reported in his Examination Report (which is in system)" "THAT THE CARGO IS 100% EOU and it is construed as EOU only. At this juncture, the Assistant and Commissioner (Export) failed to verify the Examination Report in the system which is the most important evidence at the time of the exportation of the said Shipping Bill." These are totally contrary statements. Once the duly endorsed Shipping Bill asserts that No Examination was carried out, how can it be negated subsequently without any verifiable evidence, is not known.
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18Customs Appeal No. 41042 of 2016 (B) The Review Order states that 'On the belief that the _ export is by FOU' and claims that these remarks are part of their website notings. But the document towards this claim was neither made available to the exporter / nor is available on record when the appeal has been taken up for Hearing or now at the time of DOP Hearing. | .
(C) The Adjudicating Authority in his OIO No. 1356 dated 30.6.2015 states that he has got the facts verified by the Supdt of SEZ and gives the following findings :
"11, Also, in response to this office fetter C. No. VITI/06/1 97/2014-Export dated 09.06.2015, the authorized officer, AMRL SEZ, Nanguneri, Tirunelveli vide letter O.C. No. 78/2015 dated 15.06.2015 has confirmed _that exporter is a SEZ Unit from the date of fetter of approval issued vide fetter of approval no. 8/11/2011/AMRL-SEZ/163 dated 02.12.2011. Further, the Superintendent of Central Excise, City Range, C-50, Sipcot Industrial Complex vide their letter _0.C. No. 1224 dated 19.06.2015 has confirmed _that_the goods that were exported under the Shipping Bill No. 5673479 dated 29.05.2013 are of origin from SEZ unit and have been exported out of SEZ unit stock held at the warehouse at Tuticorin. [Emphasis supplied (D) Thus, again (B) and (C) above are totally contrary claims of the Revenue. While in case of (C), the Adjudicating authority has cited the OC Number and name and designation of the official confirming that the goods belong to SEZ, the (B) above is a mere statement without any documentary evidence back up.
v--
19Customs Appeal No. 41042 of 2016 (E) Even otherwise, by (B) above, which has come up at the : time of Review Order for the first time, does this mean that the Revenue doubts the authenticity of the OC No. 78/2015 dated | 15.6.2015. of the Supdt? In such a case, the statement of the person who is working as Superintendent at SEZ and who has access to all the details at that end, would carry more weight than the bland statement made by the Tuticorin port Customs official in the portal, for which no evidence exists, (vill) Documentary evidence discussed above coupied with my _ observations makes it clear that Revenue has not made out any case to the effect that the export was carried out. by the EOU unit. On the other hand, the documentary evidence brought in by the exporter with Shipping Bill and ARE-1 filed by SEZ duly endorsed by Tuticorin Customs officials clarifies that the export has been carried out by the SEZ unit. These facts do not stand negated by way of any rebuttal or by way of any contrary evidence brought in by the Revenue.
(ix) Therefore, I hold that that the exports have been carried out by
-- SEZ unit only. Hence, the question of payment of any Export Duty by the SEZ unit would not arise. Collection of Export Duty is not proper and legal and is void ab initio. The collected Export Duty is required to be refunded to them on this count alone, without the appellant having to undergo the rigours of various provisions relating to refund claim
18. NowIam taking up the other issues arising in the present appeal.
(i) The appellants having paid the Expert Duty which is not payable by them,. but which was paid 'Under Protest' [though for some other reason], filed their Refund claim. The Refund claim was filed by the SEZ unit and the same was rejected vide letter dated 21/07/2014 on the ground that they have not filed any appea! against the re- . assessment of the Shipping Bill. The authority has cited the case law of LA 20 Customs Appeal No. 41042 of 2016 Priya Blue industries Ltd. Vs. CC [£2004 (172) ELT 145 (SC), for taking this stand.
(ii) As pointed by the appellant, I find that there is no documentary. evidence from Revenue to indicate that the Export Duty was paid by them on account of any re-assessment. In terms of Section 17(4) & Section 17(5), if the Shipping Bill is re-assessed, a speaking order is to be issued. On the basis of this Order, an appeal can be filed by the exporter. Even the Review Order dated 28/08/2015 does not state that any speaking order was passed in terms of Section 17(4) & 17(5). It states that "As such the proper officer insisted on payment of applicable duty or else advised them to file the Shipping Bill with respective SEZ, if they want to avail exemption. The exporter instead of filing Shipping Bill at SEZ paid duty under _ protest probably because they could not establish that the goods were of SEZ origin". Such directions, particularly when they are not even in writing, as has been seen in the earlier paragraphs, cannot be taken as a speaking order so as to enable the assesse to file an appeal before the Commissioner (Appeals). Therefore, I hold that the appellants were 'not required to file any Appeal before the Commissioner (Appeals) .
(iii) Further, while the authority has relied on the Priya Blue case law, it is to be noted that this judgement was rendered by the Supreme Court when the assessments were carried out by the Customs officials. Subsequently under the self-assessment regime, decisions were rendered in the case of Aman Medical Products Lts. Vs.
- Commr. of Customs, Delhi [2010 (250) ELT 30(Del)] and Micromax Informatics Ltd. Vs. Union of India [2019 (369) ELT 543 (Bom), holding that in case of self-assessed shipping bills / bills of entry, there is no need to file any appeal. During the period under consideration, these judgments of the High Court were the prevailing law. Only much later in year 2019, the Hon'ble Supreme Court in the case of ITC Ltd,
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21Customs Appeal No. 41042 of 2016 Vs. CCE, Kolkata-IV [2019 (368) ELT 216 (SC)] has decided that Priya Blue case would hoid good even under self-assessment regime. During the period under consideration, the present appellant would not have
-any inkling that in future after about 6 years the Aman and Micromax judgments would be overturned by Supreme Court in the case of ITC. Since they were covered by Aman and Micromax case law, there would be no requirement to file any Appeal before the Commissioner (Appeals). |
19. Therefore, in any view of the matter, I hold that the appellant was not required to file any appeal before the Commissioner (Appeals).
20. After the rejection of their refund claim, the appellants have taken up the matter with the Adjudicating authority to Vacate the Under Protest letter and to grant the consequential refund.
21. The Adjudicating authority in terms of Section 17(5) of the Customs Act 1962, took up the re-assessment, caused necessary verification and after receiving @ letter from the Supdt. [cited supra] that the goods have been exported by the SEZ and after finding that SEZ is not required to pay the Export Duty has passed the OJO No. 1356/2015 dated 30.06.2015 vacating the Under Protest payment and holding that the appellant is eligible for the refund claim. Since he has given a detailed finding and passed a considered order, I do not find any error in this perfectiy legal OIO.
22. Being aggrieved by this OIO, the Revenue wanted to file the Appeal before the Commissioner (Appeal) and accordingly Review Order dated 28/08/2015 was passed by the designated authority. The details of Review Order and the Appeal filed and OIA passed make a very interesting reading with many twists, turns and surprises, which are being dealt below :
(i) As I have held above, once the export is proved to have been carried out by the SEZ, there is absolutely no case for the Revenue to AL 22 Customs Appeal No. 41042 of 2016 deny the consequent refund claim. Therefore, the onus was cast upon 'the Revenue to bring out all the materials to the effect that the exports have not been carried out by the SEZ, but has been carried out by the EQU.
(ii) Towards this, Review Order dated 28/08/2015 was prepared, wherein for the first time the details of "2.1- As such the proper officer insisted on payment of applicable duty or else advised them to file the Shipping Bill with respective SEZ, if they want to avail exemption. The exporter instead of filing Shipping Bill at SEZ paid duty under protest probably because they could not establish that the goods were of SEZ origin" was brought in, without any corroborative evidence whatsoever. The details of the claim that 'the Physical examination was conducted and it was found that the ' goods belonged to EOQU' were uploaded in the portal, is again without any documentary evidence to this effect. The OIO was taken as passed in terms of Section 149 of the Customs Act 1962 for filing the Appeal by Revenue, whereas OIO was dealing the issue under Section 17(5) of the Customs Act, 1962.
23. Now by these facts, it is sought to be proved that the exports have been done by EOU and the Appeal! was filed against the EOU unit and not against SEZ unit. I have already held above that the stand taken in the Review Order is not correct when viewed with factual details. Knowing fully well that all along the contest has been carried out by SEZ, they were not even made a party in the Appeal [though I do not see any provision to do so]. As per me, this was done since the Revenue viewed that if the SEZ is made as the Respondent, their basic case that EOU is the exporter, goes out of the window. Therefore, in their vigorous pursuit, Revenue declared the EOU as the Respondent.
24. Since they had common office, the appellants herein could come to know about the Appeal filed against the EOU unit and filed their cross-
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23Customs Appeal No. 41042 of 2016 objection [probably as an intervener]. They attended the PH and made all the submissions that a wrong entity was made the Respondent in the Appeal and hence the same is required to be dismissed. The Commissioner (Appeals) has simply repeated the Review Order / Grounds of Appeal and has not given any finding about the objections raised by the appellant and passed the impugned Order.
25. Before the Adjudicating authority, the SEZ unit and the Revenue were there. In case of any grievance against the Order-in-Original passed, the affected party is allowed to file an appeal, making the other party as the respondent. I do not see any provision to discard the party in the Adjudication order while an Appeal is filed. In this case itself, hypothetically speaking, while all along Tuticorin Customs was on the other side, if the O10 were to be against the SEZ, could SEZ have filed their Appeal by making SEZ Customs as Respondent instead of Tuticorin Customs by citing some reason? Absolutely not. |
26. As discussed in the earlier paragraphs, the Adjudicating authority has passed in terms of Section 17(5), whereas the Appeal was filed terming the same as amendment carried out in terms of Section 149. The Commissioner (Appeals), without going into the factual details has erred in holding that the OIO was passed under Section 149, since she is referring to the amendment/conversion of Shipping Bill carried out by the Adjudicating Authority.
27. Non-making of SEZ as Respondent is fatal to the Revenue's case, since as on date, the impugned OIA does not decide the issue against the SEZ, whereas the OIO had decided in favour of SEZ.
28. In view of the foregoing, I hold that the impugned OIA passed against the EOU unit is not proper and legal and hoid that the OITA is required to be set aside. I do so. | LA 24 Customs Appeal No. 41042 of 2016
29. The Learned AR had raised the issue about the OIO being an order of re-assessment of re-assessment. As discussed above, there was no re- assessment in terms of Section 17(4) at the time of directing the exporter to pay the Export Duty. Hence, the OIO is not re-assessment of re-assessment
- but is the first re-assessment order only.
30. Before parting, I would like to also point to another issue. While the Export Duty was paid 'Under Protest', the request to vacate the same can come from both the sides. Revenue can issue the Show Cause Notice as to why the Export Duty paid 'Under Protest' should not. be appropriated by vacating the same. In this case, if the Revenue was so sure that the actual exporter was EOU, they should have issued the SCN on this count and appropriated the same. In the documents placed before me there is nothing to indicate that such a step was taken by the Revenue. On the other hand, the appellant having irrefutable documentary evidence, has initiated the vacation proceedings in order to get the refund.
31. Another point which came to notice during the present Hearing is that while the Revenue has made a huge issue out of the disputed consignment documents pertaining to SEZ being presented before Tuticorin Customs authorities instead of SEZ Customs authorities, on a specific query from the Dept., the appellant has filed a letter dated 26.08.2015 [Page No. 93 of the Appeal Book] detailing about 30 such exports prior to the present Shipping Bill and further 10 more exports after the present Shipping Bill, wherein based.on the very such documents prepared and submitted by the SEZ unit, the Turicorin Customs authorities have been allowing the exports to take place. This completely flies against the present stand taken by the Revenue that the that SEZ unit should have necessarily filed the documents with the SEZ authorities and not before the Tuticorin authorities.
32. To summarize my conclusion :
25Customs Appeal No. 41042 of 2016
(a) The documentary evidence provided by the Appellant read with the findings of Adjudicating Authority in his OIO No. 1356/2015 dated 30/06/2015 leaves no room for doubt that the exports have been carried out by the SEZ unit only. Hence, the collection of Export Duty from SEZ is not legal and is required to be refunded on this count itself.
(b) The self-assessed Shipping Bill was not re-assessed by way of any proper speaking order under Section 17(4) & 17 (5) of Customs Act 1962, for directing the exporter to pay the Export Duty. Hence, there was no requirement for the appellant to file any appeal before the Commissioner (Appeals).
(c) The OIO is not re-assessment of re-assesment order. It is a proper Order in terms of Section 17(5) taking up the issue of vacating the Under Protest payment and coming to a conclusion after proper verification of the factual details.
(d) The OIA passed against the EOU unit is not legal since they were not a party at any stage and all the litigation was carried out only by the SEZ unit. This also results in a peculiar situation of the Order-in-
Original passed In favour of SEZ, not being chalienged, nor being overturned by the impugned OJA, since SEZ was not made a Respondent at all. The OIA stands set aside for the reasons specified at Para 26 to 28 above.
(e) The fact that the appellant has filed the documents before the Tuticorin authorities and not before the SEZ authorities, does not have any adverse impact in this case. It stands proved that the Tuticorin ' Customs authorities have been permitting such clearances prior to and subsequent to this consignment [in respect of 10 Shipping Bills]. If this procedure is held as erroneous, the error is from both the sides equally, since the Customs authorities were also permitting such a 26 Customs Appeal No. 41042 of 2016 clearances. Hence the appeliant cannot be singled out for a different treatment.
33. I hold that the impugned Order-in-Appea! is legally not sustainable and I set aside the same and allow the Appeal. I hold that the Appellant is eligible te claim the refund of Export Duty paid by them.
34. The reference is answered and the difference of opinion stands resolved on the above terms. The papers may be put up before the Division Bench for deciding and releasing the Final Order.
(Order was pronounced in the open court onde 2071 Lon ----
(R. Muralidhar) Member (Judicial) Pooja 27 Customs Appeal No. 41042 of 2016 MAJORITY ORDER As per the majority decision, the impugned order is set aside. The appeal is allowed with consequential relief, if any, as per law.
(dictated and pronounced in court on 08.04.2024) = TV addleous Saw New { op RDN S00y (VASA SESHAGIRI RAO) (SULEKHA BEEVI. C.S) Member (Technical) Member (Judicial) gs