Custom, Excise & Service Tax Tribunal
M/S. Big Apple vs Cce, Hyderabad on 22 October, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court II
Date of Hearing:22/10/2010
Date of decision:22/10/2010
Appeal No.C/626/09
(Arising out of Order-in-Appeal No.83/2009(H-II) Cus dt. 15/10/2009 passed by CC,CE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Big Apple
..Appellant(s)
Vs.
CCE, Hyderabad
..Respondent(s)
Appearance Mr. Y. Srinivasa Reddy, Advocate for the appellant.
Mr. K.S. Chandrasekar, JDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is directed against the Order-in-Appeal No.83/2009(H-II) Cus dt. 15/10/2009.
2. The relevant facts that arise for consideration are that the appellants had filed a Bill of Entry No.3749 dt. 14/10/2005 for clearance of Intel Dot Stations through the ICD, Hyderabad. The value of each piece of the imported goods was declared at US $ 61 which was re-determined by the assessing authority as US $ 85 per piece. When the matter came up in appeal before the Commissioner(Appeals), he re-fixed the price at US $ 75 per piece. Aggrieved by the said decision, the appellants preferred an appeal to the Tribunal and the Tribunal vide Final order No.22 & 23/2008 dt. 2/1/2008 upheld the contention of the appellants and held that the value of US $ 61 declared by them should be accepted. Based on the said decision of the Tribunal, the appellants filed a refund claim on 13/10/2008 before the respondent seeking refund of the excess duties paid by them. The same was rejected by the respondent on the ground that the claim was hit by limitation of time inasmuch as it was filed beyond the stipulated time limit of six months as laid down in Section 27(1) of the Customs Act, 1962. Aggrieved by such rejection of the refund claim by the adjudicating authority, the appellants preferred an appeal before the ld. Commissioner(Appeals). Ld. Commissioner(Appeals) after considering the submissions made by the Counsel before him upheld the order-in-original and rejection of refund claim as being time bared. Hence this appeal.
3. Ld. Counsel would draw my attention to the findings of both the lower authorities. It is his submission that both the lower authorities have accepted the fact that the dispute regarding the valuation is settled in their favour by the Final order of the Tribunal. The only dispute being whether the refund claim filed by the appellants is within the time as provided under second proviso to Section 27(1)(ii)(b) of the Act. He would submit that the fact that the appellants have paid the duty as assessed by the adjudicating authority and took the matter in appeal before further appellate forum would indicate that amount has been paid under protest and as has been decided by the Honble Supreme Court in the case of Mafatlal industries ltd. Vs. UOI [1997(89) ELT 247 (SC)] and followed by a Division Bench of the Tribunal in the case of Hutchison Max Telecom Pvt. Ltd. Vs. CCE, Mumbai [2004(165) ELT 175 (Tri. Del.)] and by Single Member Bench in the case of Parle Biscuits Pvt. Ltd. Vs. CC, Mumbai [2006(199) ELT 146 (Tri. Mum.)]. Hence, it is his submission that appeal may be allowed and amount claimed as refund be allowed to them.
4. Ld. DR on the other hand would submit that from 11/5/2007 new proviso was inserted to Section 27(1)(ii)(b) regarding the refunds arising out of the consequent of the judgment, decree, order or direction of the appellate authority and the said proviso clearly indicates that the period for the refund, one year or six months shall be computed from the date of such judgment or decree or order. It is his submission that in the case in hand, the Tribunal had vide order dt. 2/1/2008 had settled the issue in favour of the assessee while the assessee has filed the refund claim on 13/10/2008 i.e. beyond 6 months. It is his submission that both the lower authorities are correct in rejecting the refund claim filed by the assessee.
5. I have considered the submissions made by both sides and perused the records.
6. It is undisputed that the refund claim filed by the assessee has arisen out of the protracted litigation regarding the valuation of the imported goods. It is also undisputed that the Tribunal has, in the final order, accepted the value declared by the assessee for the import of the goods and set aside the valuation as adopted by the lower authorities for the discharge of the customs duty. It is seen that the appellants view has been on valuation from the beginning was that value is US $ 61 has got blessing in form of order by the Tribunal which has in turn resulted in excess payment of duty which the appellants claimed as refund. It is also undisputed that the appellants have filed refund claim on 13/10/2008. The only question that has to be decided in this case is whether the refund claim filed on 13/10/2008 is hit by the limitation as provided under Section 27(1)(ii)(b) of the Customs Act, 1962. The proviso which has been referred to by the ld. Commissioner(Appeals) in the impugned order reads as under:-
Provided also that where the duty becomes refundable as a consequence of judgment, decree, order or direction of the appellate authority, appellate Tribunal or any court, the limitation of one year or six months, as the case may be, shall be computed from the date of such judgment, decree, order or direction. It is also undisputed that this proviso came into statute w.e.f. 11/5/2007. It is to be seen that an earlier proviso to the same section reads as under:-
Provided further that the limitation of one year or six months, as the case may be, shall not apply where any duty and interest, if any, paid on such duty has been paid under protest. (Emphasis supplied) It is seen from the first proviso, which has been reproduced just hereinabove, indicates that the limitation one year or six months, as the case may be, will not apply where any duty, interest has been paid under protest. The only question which begs for consideration in the case in hand is whether the duty paid by the appellants on the assessment of the Bill of Entry on enhancement of value has been paid under protest or not, to which the fact is that the appellants have undisputedly challenged the valuation done by the lower authorities successfully. I find that the decision of the Division Bench in the case of Hutchison Max Telecom Pvt. Ltd. (supra) is directly on the point. With respect, I would like to reproduce the entire decision:-
In this appeal, filed by M/s. Hutchison Max Telecom Pvt. Ltd., issue relates to rejection of refund of claim filed by them.
2. Shri B.L. Narasimhan, learned Advocate, submitted that the Appellants are one of the Mobile Telephone service provider; that they had imported a consignment containing computer software; that they claimed the benefit of Notification No. 11/97-Cus., dated 1-3-1997 which exempts imported computer software falling under Heading No. 85.24 or Chapter 49 of the first Schedule to the Customs Act; that the Customs Department did not extend the benefit of exemption and accordingly they cleared the goods on payment of duty on the software; that finally the Appellate Tribunal vide Final Order No. C-1/ 3971/WZB/2000, dated 9-7-2000, reported in 2001 (132) E.L.T. 774 (T) = 2001 (43) RLT 967 allowed their appeal extending the benefit of Notification No. 11/97; that subsequently they filed a refund claim in respect of duty paid by them on the software imported by them; that the refund has been disallowed to them on the ground that the refund claim is beyond the time limit specified in Section 27 of the Customs Act inasmuch as the duty was paid on 11-7-1998 whereas the refund claim was filed on 28-3-2001. The learned Advocate, further, submitted that they could not have filed the refund claim without first challenging the assessment order passed by the Asst. Commissioner; that it is well settled that appeal is continuance of assessment proceedings; that in the present matter the assessment of the goods was ultimately done by the Tribunal vide Order dated 19-7-2000, and therefore, the refund application filed by them is within the time limit specified in Section 27 of the Act. He relied upon the decision of the Tribunal in the case of Bayshore Glass Trading Pvt. Ltd. v. C.C., Kolkata, 2002 (148) E.L.T. 1243 (Tri. - Kolkata), and NEPA Ltd. v. C.C.E., Indore, 2003 (151) E.L.T. 576 (Tri.- Del.). He finally mentioned that as the Commissioner (Appeals) had not considered as to whether the principle of unjust enrichment will be applicable the matter may be remanded for considering this aspect.
3.Countering the arguments Shri Virag Gupta, learned DR,? reiterated the findings as contained in the impugned Order wherein the Commissioner (Appeals) has given his specific finding that filing of an appeal cannot be treated as duty paid under protest and that lodging of protest gives protection against the filing of the refund claim and it does not give any protection from filing the appeal beyond the time limit specified in the Customs Act.
4.We have considered the submissions of both the sides.? It has not been disputed by the Revenue that the Appellants had claimed the benefit of Notification No. 11/97 which had been denied to them while assessing the Bill of Entry. The Appellants had challenged the disallowance of the benefit of notification and finally the Appellate Tribunal allowed them the benefit of the said Notification. It is well settled law that filing of appeal is by itself is a protest. It is not the case of the Revenue that the Appellants had filed claim for refund of duty without challenging the assessment. This was the view expressed by the Tribunal in the case of Bayshore Glass Trading Pvt. Ltd. We, therefore, hold that the refund of the duty paid by the Appellants cannot be denied to them on the ground of claim being time barred. The matter is, however, remanded to the Adjudicating Authority to consider whether the principle of unjust enrichment is applicable in the facts of the present matter after following the principle of natural justice. It can be seen that the facts before the Division Bench in the case of the Hutchison Max Telecom Pvt. Ltd. are identical to the facts in the case before me. Yet another case, Parle Biscuits Pvt. Ltd., in an identical issue, came up before the Tribunal. With respect, I may reproduce the entire decision.
Order. - The short point involved in these appeals is that Commissioner (Appeals) has rejected the refund claims filed by the appellants in respect of duty paid by them at the time of presentation of the Bill of Entry which was disputed and later on allowed by the Commissioner (Appeals) with regard to dispute relating to classification. While the appellants claimed that since the assessment order was contested by them disputing the duty liability the payment of duty has to be treated as paid under protest and therefore the time-bar should not be applicable. The Commissioner (Appeals) on the other hand held that as per Supreme Court decision in Mafatlal Industries [1997 (89) E.L.T. 247 (S.C.)] case reported at 2003 (157) E.L.T. 510 (Mad.) specially Paras 83, 84 & 86 it is obligatory that for payment of duty under protest the procedure under Rule 233B of the Central Excise Rules, 1944 should be followed.
2. Heard both parties.?
3. The learned advocate for the appellants submitted? that whenever an appeal is filed against the assessment order, the duty has to be treated as been paid under protest and placed reliance on the CEGAT decision in the case of Hutchisom Max Telecom Pvt. Ltd. v. Commissioner of Central Excise, Mumbai - 2004 (165) E.L.T. 175 (Tri. - Del.) where it was held that filing of appeal itself amount to protest and refund is not to be denied on grounds of limitation when disallowance of benefit of notification challenged by appellant and Such benefit finally allowed by Tribunal. It was submitted that in their case the classification claimed by them which was rejected by the original authority has been upheld by Commissioner (Appeals) and therefore the refund cannot be denied on grounds of limitation. Reliance was also placed on the Tribunal decision in the case of G.S. Radiators v. Commissioner of Central Excise, Ludhiana - 2005 (179) E.L.T. 222 (Tri. -Del.) where a similar view was taken.
4. Reference was also invited to the decision in the? case of Steelworth Ltd. v. Commissioner of Customs, Calcutta - 2003 (159) E.L.T. 551 (Tri. - Kolkata) wherein it was held that filing of appeal against classification adopted by the lower appellate authority is a form of protest only and refund cannot be denied on grounds of limitation. In yet another case of Nice Photo Lab v. Commissioner of Customs, Chennai - 2002 (141) E.L.T. 786 (Tri. - Chennai) it was held that time-bar was inapplicable in case refund raising out an order passed by the lower appellate authorities as refund will arise or not would be known only after the order granting refund has been passed.
5. The learned S.D.R. however, reiterated the decision? of the Supreme Court and submitted that where the procedure under Rule 233B of the Central Excise Rules, 1944 was not followed the payment of duty cannot be considered to be under protest and therefore the refund has been correctly denied by the Commissioner (Appeals).
6. I have considered the submission made by both? parties. I find that the Supreme Court decision in the Mafatlal case held that when duty is paid under the orders of the court the provision of Rule 233B will not apply and payment has to be treated as under protest. Paras 83, 84 and 86 were only referred to the certain apprehension raised by the counsel regarding sanction of refund due to delay in the decision by appellate authorities. The situation in the present case were before the Supreme Court and therefore, there is no finding in respect of such circumstances. Besides the refund is under the Customs Act where no procedure for the depositing duty under protest has been prescribed unlike Rule 233B in Central Excise Rules. Therefore as held in a series of Tribunal decision cited by the appellants the payment has to be considered as under protest and refund cannot be denied on this ground.
7. In view of above, I set aside the order of the? Commissioner (Appeals) and hold that refund cannot be denied on the ground of time-bar if it is otherwise eligible.
8. Appeals are accordingly allowed in the above terms.
7. It can be seen that in an identical situation, the Division Bench and the co-ordinate Bench of the Tribunal has taken a view on the discharge of the customs duty liability on the enhanced valuation or denial of exemption notification and preferring an appeal is payment of duty under protest and if the assessee succeeds in the litigation, the question of time bar does not arise.
8. Accordingly, respectfully following the said decisions, I am of the considered view that in this case, orders of both the lower authorities are unsustainable and are liable to be set aside and I do so. I set aside the impugned orders and allow the appeal with consequential relief.
(Pronounced and dictated in open court) (M.V. RAVINDRAN) Member (Judicial) Nr 9