Custom, Excise & Service Tax Tribunal
Posiflex Technology India Pvt Ltd vs Bangalore Customs on 11 July, 2024
Customs Appeal Nos. 28256 & 28257 of 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, BANGALORE
REGIONAL BENCH - COURT NO. 2
Customs Appeal No. 28256 of 2013
[Arising out of Order-in-Appeal Nos. 334 & 335/2013 dated 25.09.2013
passed by the Commissioner of Customs (Appeals), Bangalore]
M/s. Posiflex Technology (India) Pvt. Ltd.
#985, 4th Cross, IA Main Road
New Thippasandra
Bangalore - 560 075 ...............Appellant
VERSUS
Commissioner of Customs
Bangalore
P.B. No. 5400, Queens Road
Central Revenues Building
Bangalore - 560 001 ..............Respondent
WITH Customs Appeal No. 28257 of 2013 [Arising out of Order-in-Appeal Nos. 334 & 335/2013 dated 25.09.2013 passed by the Commissioner of Customs (Appeals), Bangalore] M/s. Posiflex Technology (India) Pvt. Ltd.
#985, 4th Cross, IA Main Road
New Thippasandra
Bangalore - 560 075 ..........Appellant
VERSUS
Commissioner of Customs
Bangalore
P.B. No. 5400, Queens Road
Central Revenues Building
Bangalore - 560 001 .........Respondent
Appearance:
Mr. Nagaraja N., Advocate for the Appellant Mr. K. Vishwanath, AR for the Respondent Coram:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Hon'ble Mr. Pullela Nageswara Rao, Member (Technical) Final Order Nos. 20534 - 20535 / 2024 Date of Hearing: 12.01.2024 Date of Decision: 11.07.2024 Page 1 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 Per: P.A. Augustian The issue involved in the present appeals is regarding rejection of refund claim of Special Additional Duty (SAD) paid on the imported goods. The Appellant had imported the goods for trading/sale and paid sales tax/VAT as per the statutory provisions. Thereafter, a claim was made as per Notification No. 102/2007 dated 14.09.2007. However, the refund claim was rejected by the Adjudication authority vide orders dated 09.01.2013 and 16.01.2013. Aggrieved by said orders, appeals were filed before the Commissioner (Appeals) and Commissioner (Appeals) as per impugned orders also rejected the appeals.
Aggrieved by the same, present appeals are filed by the appellant, since the issue is similar in both the appeals, they are taken up together for disposal by this order.
2. The Commissioner (Appeals) held that as per Notification No. 29/2010-Cus. dated 27.02.2010 superseded by Notification 21/2012-Cus. dated 17.03.2012, said Notification is applicable for all pre-packaged goods (not goods in bulk) and which are intended for retail sale (not in bulk/whole sale). As per the said order, for the retail sale, price of such goods has to be declared on the packages as required under the provisions of Legal Metrology Act, 2009 and Rules made thereunder or any other law for the time being in force. Since the goods imported are falling under the category of the said goods, Appellant is not eligible to claim refund under Notification No. 102/2007 dated 14.09.2007.
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Customs Appeal Nos. 28256 & 28257 of 2013
3. Learned counsel for the Appellant submits that the findings given by the Adjudication/Appellate authority are unsustainable on the ground that when Notification No. 29/2010 was introduced, the existing Notification No. 102/2007 was neither withdrawn nor superseded by the new Notification. Hence, both the Notifications were available to the importer at the relevant point of time. Both the Notifications provided for exemption from payment of SAD. The only difference is that Notification No. 102/2007 covered all goods imported for trading purpose, whereas Notification No. 29/2010 was available for pre-packed goods intended for resale and other specified goods in the Notification. Thus, the importer had option to follow either of them and accordingly, the Appellant preferred to pay the SAD and to make refund claim. Learned counsel relied on the decision of the Tribunal in the matter of Suburban Engineering Works (Cal.) Pvt., Ltd.-1991 (56) E.L.T. 470 (Tribunal). Learned counsel drew our attention to the Section 5A of the Central Excise Act, 1944, where there is a clear stipulation in sub-section (1A) that where an exemption in respect of any excisable goods from the whole of the duty of excise has been granted absolutely, manufacturer of such excisable goods shall not pay the duty of excise on such goods. However, Section 25 of the Customs Act, 1962 makes it clear that there is no such similar stipulation in the said provision. Therefore, the option adopted by the Appellant for following Notification No. 102/2007 was in order. The Learned counsel also drew our attention to the Public Notice No. 45/2012 dated 05.11.2012 issued by the office Page 3 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 of the Commissioner of Customs, where it is advised to the importer to follow exemption route which will reduce the burden on the importer of first paying duty and thereafter claiming refund. Therefore, there was no prohibition or restriction that exemption has to be compulsorily followed and refund cannot be allowed. To substantiate the same, the Learned counsel relied on the decision of the Tribunal in the matter of CC Vs. Westcon India Pvt. Ltd. - 2014 (304) E.L.T. 91 (Tri.-Chennai).
4. Regarding the other ground of rejecting the refund claim on the ground that Chartered Accountant certificate does not specify how he has arrived at the conclusion that the MRP/RSP does not include SAD, Learned counsel for the Appellant submits that as per Public Notice No. 5/2011 dated 21.01.2011, once certificate is issued by independent Chartered Accountant as per the format prescribed in the Public Notice, it is not correct to question the same and hold that it does not explicitly state about the non-inclusion of SAD in the retail price. Moreover, in addition to submission of certificate issued by independent Chartered Accountant, Appellant had produced Balance Sheet for the relevant period showing SAD amount as receivables in the books of accounts. The said two facts are sufficient to prove that Appellant had not passed on the incidence of SAD to their buyers. To support the same, the Learned counsel relied on the decision of the Tribunal in the matter of M/s Krishan Enterprises Vs. CC (Import), Mumbai - 2009 (237) E.L.T. 708 (Tri.-Mumbai) and M/s Salve Pharmaceuticals Pvt. Ltd. Vs. Commissioner of C.Ex., Delhi. As regards the finding Page 4 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 of the Commissioner (Appeals) that the reference to Article 265 of Constitution of India, it is regarding refund of levy which is found to be unconstitutional in reference to judgment of the Hon'ble Supreme Court in the matter of M/s Mafatlal Industries Ltd. In the present case, there is no dispute about the levy of SAD, duty is exempted by way of two Notifications. Hence, finding is not relevant and not maintainable. The Learned counsel also drew our attention to the decision of the Tribunal in the matter of M/s Westcon India Pvt. Ltd. (supra), wherein it is held as under:
"6. Aggrieved by the order of the Commissioner (Appeals), Revenue has filed these appeals. The argument of Revenue is that when SAD is exempted under Notification No. 29/2010-Cus., importer had no option to pay such exempted duty and subsequently claim refund of such duty. As per the provisions of Notification No. 102/2007- Cus. If any refund had to be claimed, the appellant should have challenged the original assessment orders on the Bills of Entry as held by the Hon'ble Supreme Court in the case of Priya Blue Industries Ltd. v. Commissioner of Customs - 2004 (172) E.L.T. 145 (S.C.). Therefore, the Revenue is praying that the Order-in-Appeal may be set aside.
7. Arguing for the respondent, the learned Advocate submits that the importer is not asking for changing the assessment made at the time of import. They are only asking for refund of the duty paid at the time of import in terms of the provisions under Notification No. 102/2007- Page 5 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 Cus. The refund under this notification is on a different footing as compared to other refunds under Section 27 of Customs Act. She points out that in the case of any goods for which SAD is payable and for which Notification No. 29/2010-Cus. is not applicable, the importer has to pay SAD as applicable at the time of importation and thereafter claim refund of SAD as per the provisions of Notification No. 102/2007-Cus. after satisfying the main condition of selling the goods on payment of applicable VAT and satisfying various other conditions in the notification. The said Notification by its very nature cannot be claimed at the time of importation of the goods. It is claimed normally almost one year after the period of importation after selling the goods on payment of VAT on such goods. In such a situation, reassessment of the goods are not intended or insisted upon by the Department. Thus, the scheme of the Notification No. 102/2007-Cus. envisages payment of duty initially at the time of importation and thereafter claiming refund subject to satisfying the condition under Notification No. 102/2007-Cus. without any reassessment.
8. In the instant case, the only difference is that there was Notification No. 29/2010-Cus. which the importer could have availed. The importer did not avail the said exemption. According to the ld. Advocate, there is nothing in the Customs Act, 1962 which compels an importer to avail an exemption provided by any particular notification. Page 6 of 13
Customs Appeal Nos. 28256 & 28257 of 2013 She points out that in the Central Excise Act, 1944, under Section 5A, there is a specific provision introduced with effect from 13-5-2005 by way of Section 5A(1A). The said Section reads as under:-
"Section 5A(1A) - For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods."
9. The ld. Advocate for respondent submits that there is no such provision under Section 25 of the Customs Act, 1962. When in the year 2005, the said clause was introduced in Central Excise Act, the Legislature did not consider it necessary to insert such provision in the Customs Act. Since such provision is not present in Customs Act, she submits that the importer cannot be faulted for having paid SAD without availing the exemption. She also argues that since the importer is not requesting for change of assessment made at the time of importation, the question of challenging the assessment as per Bills of Entries does not arise. The decision of the Hon'ble Supreme Court in the case of Priya Blue Industries (supra) is not applicable in a situation where the importers themselves are not challenging the assessment at the time of importation. The importer is only claiming refund due to them as per the provisions of Notification No. 102/2007-Cus. as in the case Page 7 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 of importers whose products are not exempted from SAD vide Notification No. 29/2010- Cus.
10. We have considered submissions on both sides. We are of the view that this is not a case where the importer is seeking change in assessment made at the time of importation of goods. Only in such a situation, the decision of the Apex Court in Priya Blue Industries (supra) would apply. Even in such cases, the Hon'ble Delhi High Court has clarified that the said decision would apply only in a case where there was a dispute between the Department and the importer at the time of importation of the goods and the matter was adjudicated either through assessment of BE or through further proceedings. Where there was no lis at the time of importation, the Delhi High Court held in the case of Aman Medicals Products Ltd. v. CC-2010 (250) E.L.T. 30 (Del.) that provisions under Section 27 of the Customs Act, 1962 for refund can be made use of for claiming duty erroneously paid without challenging the original assessment.
11. In this case, the refund is not claimed under Section 27 of the Customs Act. The appellant is not requesting for change of the assessment made at the time of importation. For grant of refund of SAD as per notification 102/07-Cus. re-assessment of Bills of Entries are not prescribed under the notification. In such a situation the argument of Revenue based on the decision of the Apex Page 8 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 Court in the case of Priya Blue Industries (supra) is totally misplaced.
5. The Learned counsel also relied on the decision of the Tribunal in the matter of M/s Picks Medical Systems P. Ltd. - 2016 (339) E.L.T. 296 (Tri.-Mumbai) and M/s Mafatlal Industries Vs. Union of India - 1997 (89) E.L.T. 247 (S.C).
6. Learned Authorised Representative (AR) for Revenue reiterated the findings of the Adjudication/Appellate authority and submits that once the SAD is exempted, while importing the goods, the importer has no option to pay the duty and to claim refund. The Learned AR also drew our attention to the letter F. No. 334/1/2010-TRU dated 26.02.2010, wherein it has been held as under:
"15.1 Additional Duty of Customs under section 3(5) of the Customs Tariff Act 15.1.1 Outright exemption from additional duty of customs (of 4%) leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975 is being provided to goods imported in a pre-packaged form and intended for retail sale. The condition of the exemption is that the goods have to be such as requiring the declaration of the retail sale price either under the Standards of Weights and Measures Act or under any other law. Full exemption is also being provided to mobile phones, watches and readymade garments falling under specified headings of the Tariff. The exemption based on refunds contained in Notification No. 102/2007-Customs dated 14.09.2007 is also being Page 9 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 retained to enable other importers to claim exemption by way of refund, if VAT is paid on the goods. Full exemption from this duty is also being provided to Carbon Black Feedstock and Waste Paper.
7. Learned AR also drew our attention to the judgment of the Hon'ble Supreme Court in the matter of ITC Ltd. Vs. CCE, Kolkata-IV - 2019 (368) E.L.T. 216 (S.C) and submits that the assessment was complete and without challenging the assessment, no refund can be made. Hon'ble Supreme Court in ITC Ltd. has held as under:
"47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self- assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act."
8. Heard both sides and perused the records. It is an admitted fact that at the time of import by the Appellant, there were two prevailing Notifications. The Notification No. 102/2007 was covering all the goods imported for trading purposes, whereas Notification No. 29/2010 was available for Page 10 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 pre-packaged goods intended for resale and other specified goods in the Notification. There was no restriction on the importers to avail the benefit of either Notifications. Moreover, the issue is squarely covered by the decision of the Tribunal in the matter of M/s Suburban Engineering Works (Cal.) Pvt. Ltd., where it is held that:-
" 9. Going by the ratio laid down in the above-mentioned catena of decisions I hold that in the present case the failure to claim exemption from duty available in terms of the Notification in question, by itself cannot invalidate the refund claim on that score alone. If the conditions had been fulfilled, the goods would have been cleared free of duty. The only disability the respondent suffered for such a failure was that they had to clear the goods on payment of duty. There is nothing in the notification to warrant the conclusion that once the notification was not applied at the time of the clearance of the goods, the same became debarred once for all. Use by the ONGC or Oil India Ltd. if established by valid evidence would take care of the requirements of the notification. Though the goods were initially supplied by the respondents to M/s. Ganson, the same had been supplied by the latter to M/s. Oil India Ltd. If the same could be established by valid documentary evidence and if after supply to them they had been actually used in the manner required under the exemption notification, there should be no objection to deny the benefit available under the said Notification. In that view of Page 11 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 the matter I see no reason to interfere with the findings of the Collector (Appeals). In the circumstances, the appeal is dismissed."
9. Regarding reliance of the learned AR on the judgment of the Hon'ble Supreme Court in the matter of M/s ITC Ltd., the issue was discussed by the Hon'ble Tribunal in the matter of M/s Westcon India Pvt. Ltd. (supra), where it is categorically held that the law laid down by the Hon'ble Apex Court in the above judgment is not applicable, where importer is seeking change in assessment made at the time of importation of goods, only in such a situation, the decision of the Hon'ble Apex Court would apply. The Tribunal in the matter of M/s Westcon India Pvt. Ltd. has held as under:
"10. We have considered submissions on both sides. We are of the view that this is not a case where the importer is seeking change in assessment made at the time of importation of goods. Only in such a situation, the decision of the Apex Court in Priya Blue Industries (supra) would apply. Even in such cases, the Hon'ble Delhi High Court has clarified that the said decision would apply only in a case where there was a dispute between the Department and the importer at the time of importation of the goods and the matter was adjudicated either through assessment of BE or through further proceedings. Where there was no lis at the time of importation, the Delhi High Court held in the case of Aman Medicals Products Ltd. v. CC - 2010 (250) E.L.T. 30 (Del.) that provisions under Section 27 of Page 12 of 13 Customs Appeal Nos. 28256 & 28257 of 2013 the Customs Act, 1962 for refund can be made use of for claiming duty erroneously paid without challenging the original assessment."
10. We find that, regarding reliance on the letter F. No. 334/1/2010-TRU dated 26.02.2010, it is explaining the scope of Notification No. 29/2010, wherein outright exemption from SAD was provided to goods imported in pre-packaged form and intended for retail sale. In the absence of any specific provision superseding the Notification No. 102/2007 dated 14.09.2007 in Notification No. 29/2010, when it was introduced, it is open for the Appellant to opt for either of them and in the case the appellant has opted for Notification No. 102/2007 and paid SAD at the time of import, which cannot be considered as admission of the liability to pay SAD.
11. In view of the above discussion and following the ratio of the above decisions, we find that the appellant is eligible for refund of SAD under Notification No. 102/2007 dated 14.09.2007.
12. Accordingly, impugned order is set aside and the appeal is allowed with consequential relief, if any as per law.
(Order pronounced in open court on 11.07.2024) (P.A. Augustian) Member (Judicial) (Pullela Nageswara Rao) Member (Technical) ...iss Page 13 of 13