Custom, Excise & Service Tax Tribunal
Oil & Natural Gas Corporation Ltd vs Commissioner Of Customs (Import), Nch, ... on 24 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/85513/13-MUM
[Arising out of Order-in- Appeal No. 958/MCH/AC/GR.IV/2012dtd. 4/12/2012 passed by the Commissioner of Customs (Appeals), Mumbai Customs Zone-I]
For approval and signature:
Honble Mr Ramesh Nair, Member(Judicial)
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1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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Oil & Natural Gas Corporation Ltd.
:
Appellant
VS
Commissioner of Customs (Import), NCH, Mumbai
:
Respondent
Appearance
Shri. V.B. Dhar, Consultant for the Appellant
Shri. A.K. Singh, Addl. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 24/12/2014
Date of decision: /01/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. 958/MCH/AC/GR.IV/2012 dated 4/12/2012 passed by the Commissioner of Customs (Appeals), Mumbai Customs Zone-I . In the impugned order, the Ld. Commissioner (Appeals) set aside the Order-in-Original and held that refund claim survives as on date and may be finalized after proper verification of requisite documents. The fact of the case is that the appellant entered into tern-key project with NKK corporation, Tokyo, Japan for setting up a production platform at Bombay High (Coordinates:19 Degree, 21 minutes, 0.5044 Seconds(N) and 71 Degree, 18 Minutes, 17.4850 Seconds(E), hereinafter referred to as the ICG project. The ICG project is located in the Exclusive Economic Zone of India but falls outside the Designated Area in the Continental Shelf as declared by the Government of India in the Ministry of External Affairs S.O. No. 429 (E) DATED 18/7/1986 effective from 15/1/1987. The Central Govt. had vide Notification No. 11/87-Cus dated 14/1/1987 extended the Customs Act, 1962 and Customs Tariff Act, 1975 to the designated areas referred as above. In the view of the said ICG Project not falling within the Designated Area, the CBEC in consultation with Ministry of Law, clarified vide Circular No. 28/95-Cus dated 28/3/1995, that
(i) Any goods brought directly from a foreign country to the said ICG Project for construction of the project would not attract Customs duty.
(ii) The ICG project of M/s. ONGC Ltd. did not fall within the Designated Area.
Ministry of Finance, Department of Revenue, CBEC vide its letter F. NO. 450/65/92-Cus IV dated 18/9/1994 had further clarified the issue in consultation with Ministry of law and Ministry of External Affairs that if a drilling rig is brought from a foreign country to a place in EEZ for exploring/exploitation of oil, it would not constitute import for the purpose of the Customs Act, 1962 and no duties can be levied on such rig/equipments in the zone outside the Designated Areas and beyond the territorial water of India. M/s. NKK corporation (Contractor) supplied a consignment of Equipments and Material for ICG Project to M/s ONGC, vide Invoice No. NKK-SI-001 DATED 28/10/1989 for use in construction of the said ICG project which was brought directly to the project site for installation. In terms of the above mentioned statutory provisions, the consignment did not attract Custom duty. However, the appellant filed bill of entry no. 2824/1 dated 10/11/1989 in respect of the goods referred above. The said goods were assessed to the duty of Rs. 34,44,691/- and the duty was paid vide cash No. 1668 dated 18/12/1989, since in terms of the statutory provisions mentioned above and the imported goods eligible for exemption of duty the appellant filed refund claim with Asst. Collector of Customs in-Charge Refund Deptt. for the entire duty paid erroneously. The original authority vide order-in-original No. S/6-Group-IV-14/90R dated 21/8/1995 rejected the claim on the ground that appellant has not submitted (a) duplicate copy of bill of Entry (b) Location Certificate from Ministry of External Affairs, to prove that the same co-ordinates do not fall in the Customs area. The refund claim also rejected on the ground that the appellant had not proved that incident of duty paid by them had been passed on to any other person and failed to satisfy doctrine of unjust enrichment. The appellant filed appeal before the Commissioner(Appeals), who vide order No. 205/99 AP-Misc (Sea) dated 11/2/1999 remanded the case to the lower authority for de-novo consideration with the following findings:-
It is observed that lower authority rejected appellants claim in absence of certain documents, which the appellant now is in possession. In view of this, I remand the case back to lower authority for denovo consideration with direction that the appellant be granted an opportunity to present their case before lower authority within 30 days form the receipt of this order In denovo adjudication which was supposed to be completed within one month as per the Commissioners (Appeals) order, the Asstt. Commissioner of Custom (Import), Gr. IV, New Custom House took more than 12 years for passing the denovo adjudication order No. 1149/AC/Gr. IV/AK/2011-12 dated 10/1/2012, wherein the refund was once again rejected on the ground of non submission of various original documents. However, in the denovo adjudication it was recorded that custom duty paid on the subject goods was not leviable and same has been applied for refund by the applicant.
1.1 Aggrieved by the above rejection order dated 10/1/2012, the appellant filed the appeal before the Commissioner of Customs(Appeals), Mumbai Zone-I, who vide order-in-appeal No. 958/MCH/AC/Gr IV/ 2012 dated 4/12/2012 though set aside the rejection order of the lower authority and held that refund claim survives as on date and may be finalised after proper verification of requisite documents. In the said order-in-appeal the Commissioner (Appeals) directed that sanctioning authority shall maintain the ratio of the case laws of [2000(120) E.LT. 0285(SC)M/s. Flock India Pvt. Ltd.; [1997(89) E.L.T(S.C.)] Mafatlal Industries Ltd. Versus Union of India and [2004(172) E.L.T. 145 (S.C.)]Priya Blue Ltd. Vs. CC.
Aggrieved with the above Orderin-Appeal the appellant is before me.
2. Shri. V.B. Dhar, Ld. Consultant for the appellant submits that as regard the merit of the case there is no dispute between Revenue and the appellant as the in any of earlier orders, it has been admitted that payment of duty for which refund is sought for was not payable. Therefore the Commissioner (Appeals) in the remand order wrongly directed the lower authority that the ratio of cases of M/s. Flock India and Priya Blue Industries Ltd (supra) to be maintained. The commissioner (Appeals) has not discussed or given any finding how case of M/s. Flock India and Priya Blue Industries Ltd. are applicable in the present case. The Ld. Counsel further submits that in the present case the goods in respect of which Bill of Entry was filed and custom duty was paid were never imported as the same were directly gone out of Indian territory of water. It is his submission that since the goods have not reached to the custom territory even though Bill of Entry was filed but goods were not available for assessment. Hence in the present case it could not be said that assessment in terms of Section 17 of Customs Act has taken place. He submits that the assessment of imported goods can only be done if goods are presented for assessment. Since the subject goods had never entered into custom frontier, which is admitted fact even in the impugned adjudicating authoritys order dated 10/1/2012, the goods were never imported and could not have been assessed by custom in terms of Section 17 of the Customs Act. It is his submission that due to the above reason it cannot be treated that there is assessment order which should have been challenged. He further submits that the issue of challenging the assessment has never been raised in earlier two adjudication order and Commissioner(Appeals) order in this very case, therefore there was no reason or change of circumstances in directing the lower authority to maintain the ratio of M/s. Flock India and Priya Blue Industries Ltd cases. He further submits that as per all the previous proceedings in this case, it is admitted fact that there is no lis between appellant and Revenue as regard duty being not payable on the subject goods. He placed reliance on the [2010(250) E.L.T 30] Aman Medical Product Ltd. Vs. CC, Delhi wherein Honble High Court held that if the duty paid by the assesse and borne by him and if there is no contest or lis and hence no adversarial assessment ordered. Hence non filing of appeal against assessment of Bill of Entry, when there is no lis between importer and Revenue at the time of payment of duty, will not deprive importer of his right to file refund claim. He further submits that right from filing the refund application and subsequently from time to time the appellant has submitted all the documents relevant to the refund claim, therefore the Commissioner (Appeals) ought not to have remanded the case to the lower authority, he should have allowed the appeal.
3. On the other hand, Shri. A.K. Singh, Ld. Addl. Commissioner (A.R.) appearing for the Revenue reiterates the findings of the impugned order. He further submits that the appellant is required to challenge assessment of Bill of Entry without which they are not entitled for the refund claim. Therefore the findings of the Commissioner(Appeals) is correct and legal and same may be maintained.
4. I have carefully considered the submissions made by both the sides.
5. From the facts of the case it is observed that in various proceedings, in the present case of refund claim, it has been consistently admitted that the custom duty paid by the appellant on the goods was not payable. I have carefully gone through the earlier orders and found that the sanctioning authority has clearly recorded the finings as under:
It follows from the above and the Notification 64/97 Cus(N.T)dated 1/12/1997 that the Customs Act, 1962 and the Customs Tariff Act, 1975 were not extended to the location of the ICG installation of M/s. ONGC Ltd at the time of import of the subject goods on which Customs duty of Rs. 34,44,691/- were paid vide cash No. 1668 dated 18/12/1989 against Bill of Entry No. 2824/1 dated 10/11/1989. Evidently, in the absence of applicability of the Customs Act, 1962 and the Customs Tariff Act, 1975, the Customs duty paid on the subject goods was not leviable and the same has applied for refund by the applicant. From above findings it is clear that the Revenue has categorically admitted that custom duty in this case was not payable. Even in the first round of proceedings, the Commissioner (Appeals) also not raised the issue of challenge of assessment of Bill of Entry. From this fact, now in the impugned order the Commissioners direction that the ratio of M/s. Flock India and Priya Blue Industries Ltd. is maintainable is absolutely wrong. On going through the Honble Delhi High Court judgment of Aman Medical Product Ltd (supra), I observed that the ratio of the judgment is applicable in the present case, the relevant part of the judgment is reproduced below:
3.?Before we proceed to decide the issue, it would be necessary to reproduce the relevant part of the relevant provision, namely, Section 27 of the Customs Act, 1962 which is as under :
27. Claim for refund of duty. - (1) Any person claiming refund of any duty-
(i) paid by him in pursuance of an order of assessment; or
(ii) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs -
(a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year.
(b) in any other case, before the expiry of six months, from the date of payment of duty and interest, if any, paid on such duty in such form and manner as may be specified in the regulations made in this behalf and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person:
Provided that where an application for refund has been made before the commencement of the Central Excise and Customs Laws (Amendment) Act, 1991, such application shall be deemed with in accordance with the provisions of sub-section (2).
4.?If therefore we refer to language of Section 27, it is more than clear that the duty which is paid is not necessarily pursuant to an order of assessment but can also be borne by him. Clauses (i) and (ii) of sub-section (1) of Section 27 are clearly in the alternative as the expression or is found in between clauses (i) and (ii). The object of Section 27(i)(ii) is to cover those classes of case where the duty is paid by a person without an order of assessment, i.e. in a case like the present where the assessee pays the duty in ignorance of a notification which allows him payment of concessional rate of duty merely after filing a Bill of Entry. In fact, such a case is the present case in which there is no assessment order for being challenged in the appeal which is passed under Section 27(1)(i) of the Act because there is no contest or lis and hence no adversarial assessment order.
5.?The Tribunal has referred to the cases of CCE, Kanpur v. Flock (India) Pvt. Ltd. [2000 (120) E.L.T. 285] and Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive), 2004 (172) E.L.T. 145 (S.C.). In both these cases, referred to by the Tribunal there was an assessment order which was passed and consequently it was held that where an adjudicating authority passed an order which is appealable and the party did not chose to exercise the statutory right of appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that adjudicating authority had committed an error in passing his order. These judgments will therefore not apply when there is no assessment order on dispute/contest, like as is in the facts of the present case.
6.?We, therefore, answer the question framed by holding that the refund claim of the appellant was maintainable under Section 27 of the Customs Act and the non-filing of the appeal against the assessed bill of entry does not deprive the appellant to file its claim for refund under Section 27 of the Customs Act, 1962 and which claim will fall under clause (ii) of sub-section (1) of Section 27.
7.?We accordingly set aside the impugned order dated 3-4-2008 of the CESTAT [2008 (228) E.L.T. 593 (Tri.-Del.)] and uphold the order of the Commissioner of Customs (Appeals) dated 28-1-2005 and remand of the matter to the original authority viz Deputy Commissioner of Customs (Refund) to examine the merits of the matter in accordance with law after providing due opportunity to the appellant.
From the above judgment of the Honble High Court in case where duty paid was borne by the importer and there is no lis between importer and the Revenue there is no need of challenging the assessment of bill of entry. In the present case also the fact of the case is not under dispute, that duty paid by the appellant is born by them and there is no lis or contest by either side on the issue of levyability of duty on the subject goods. In view of the above factual position and settled legal position in the present case, the ratio of M/s. Flock India and Priya Blue Industries Ltd. case are not applicable.
5.1 The Ld. Commissioner (Appeals) in his order recorded finding as under:
3. I have gone through the facts of the case and submissions made by both the sides. The appellant has filed the requisite documents including i) CBEC circular NO.. 28/95-Cus dated 27.03.1995 ii) Ministry of External Affairs Notification SO 643(E) dated 19.09.1996 iii) Notification No. 64/97 Cus (N.T.) dated 01.12.1997 and produced a copy of the respective acknowledgment dated 22.01.1990 of submission of the requisite documents. The department neither contested nor contradicted this contention of the appellant. In order to fulfill the principles of natural justice, there is need to reconsider the legitimacy of the impugned claim. However, while fanlizing the impugned claim, the sanctioning authority shall maintain the ratio of the case laws of Flock India Pvt. Ltd(2000(120) ELT 0285(SC); Mafatlal Industries Ltd. Versus Union of India 1997(89) E.L.T. 247(S.C.) and Priya Blue Industries Ltd. V. CC 2004 (172)E.L.T. 145(S.C.).
4. In view of the above discussion I set aside the impugned order. The refund claim survives as on date may be finalized after proper verification of requisite documents.
From clear findings of the Ld. Commissioner (Appeals) there is no reason left for the lower adjudicating authority to deny the refund claim of the appellant. It appears from the chain of correspondence made by the appellant with the sanctioning authority as well as with the lower appellate authority that all the requisite documents have now been submitted.
5.2 In view of the above discussion I remand the matter to the sanctioning authority to dispose of the refund claim of the appellant in accordance with the law within a period of 2 months from the date of receipt of this order. Needless to say that the appellant should be given personal hearing. The appeal is disposed of in the above terms.
(Operative part of the order pronounced in the Court on / 01/2015)
Ramesh Nair
Member (Judicial)
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