Customs, Excise and Gold Tribunal - Calcutta
Bengal Tools Ltd. vs Commr. Of Customs on 20 January, 2003
Equivalent citations: 2003(88)ECC217, 2002ECR252(TRI.KOLKATA)
JUDGMENT Archana Wadhwa, Member (J)
1. The brief facts of the case are that M/s Bengal Tools Ltd. imported Power Tillers vide Bill of Entry No. 1-554 dated 14.2.95 which was classified and assessed to duty under Customs Tariff Heading 8701.10 and Central Excise Tariff 8701 read with Notification No. 162/86 where rate of duty was charged 65% CBD+CV Nil. The importer paid Customs duty equivalent to Rs. 5,73,324 and cleared the goods for home consumption. Afterwards, they filed a refund claim before the lower authority on the ground that assessment done by the department is wrong. The actual applicable CTH will be 8432.80 and applicable rate of duty will be 25% CBD+CV Nil. So, excess duty of Rs. 3,52,815 should be refunded to them. The lower authority admitted the refund and re-assessed the Bill of Entry as claimed by importer and has sanctioned the refund.
2. The Revenue filed an appeal against the above order before the Commissioner (Appeals) merely on the ground that the assessment of Bill of Entry which is quasi-judicial order was not challenged by way of filing the appeal there against. As such direct refund claim should not have been entertained by the authorities below in terms of the Hon'ble Supreme Court's decision in the case of Commr. of Central Excise, Kanpur v. Flock (India) Ltd., 2000 (71) ECC 4 (SC) : 2000 (120) ELT 285 (SC).
3. The appellate authority accepted the appeal filed by the Revenue and observed as under:
"7. In the present departmental appeal it is noticed that Bill of Entry No. 1-554 dated 14.2.95 was filed and assessed to duty in February 1995 and duty paid accordingly. No appeal was filed against this Bill of Entry on the ground that lower authority has wrongly assessed then goods under CTH 8701.10. Rather they filed refund claim directly. The lower authority set aside the order of assessment passed in form of Bill of Entry and has sanctioned the refund. As assessment of Bill of Entry is a quasi-judicial function and it is an appealable order, lower authority cannot sit in appeal under Section 27 of the Customs Act, 1962. If respondent importer was aggrieved from assessment of the Bill of Entry, they should have filed an appeal before proper authority. As no appellate order is available, and order cited by importer relates to another Bill of Entry No. 1-897 dated 20.1.95, assessment done in Bill of Entry No. 1-554 dated 14.2.95 stands final. Action of the lower authority in deciding the case on merit and sanctioning the refund is without jurisdiction, illegal and thus not maintainable. I set aside the order of the lower authority and a) low the departmental appeal."
4.1 have heard Shri S.K. Bagaria, Ld. Advocate appearing for the appellants and Shri N.K. Mishra, Ld. JDR. Shri Bagaria, Ld. Advocate submitted that the provisions of Section 27 of the Customs Act, are not perimateria with the provisions of Section 11B of the Central Excise Act and as such the Hon'ble Supreme Court's decision in the case of Flock (India) Pvt. Ltd. is not applicable. Section 27 of the Customs Act, confers the statutory rights to file the refund claim of duty paid in pursuance of an order of assessment thus providing statutorily claim of refund of duty even without challenging the assessment. If the assessment has to be challenged by way of filing a separate appeal, the provisions of Section 27 would become nugatory and meaningless. He has also relied upon the Hon'ble Supreme Court's decision in the case of Karnataka Power Corporation Ltd. v. CC. (Appeals), 2002 (143) ELT 482 which has held as under:
".......had imported Enoxy Coils and filed Bills of Entry which were assessed under Sub-heading No. 8544.11. No appeal was filed against the orders of assessment on the Bills of Entry and the Customs Duties so assessed were paid. Thereafter, the assessee filed an application for reassessment and refund a part of the duty on the ground that the correct classification should have been under sub-heading 8501.64. Letters in this regard were addressed to the Assistant Collector. Ultimately, the Refund Application was rejected and the rejection order was also upheld by the Collector (Appeals) and thereafter by the Tribunal. The Hon'ble Supreme Court was pleased to hold that the assessee had sought the amendment of classification before the Assistant Collector of Customs himself and it was in that light that the issue had to be decided. The orders of the Collector (Appeals) and the Tribunal were set aside and the matter was remanded back to the Assistant Collector of Customs for deciding the claim of the assessee."
5. I find that the above decision in an identical situation was considered by the Division Bench of this Tribunal in the case of Mecon Ltd. v. CC, Calcutta and vide its Order No. A-1183/Kol/2002 dated 11.11.2002, it was held as under:
"(c) Following the binding decision, we find no reason to reject the present Refund Claim on the ground as made out by the lower authorities. We would therefore consider that lodging the claim of refund would amount to filing a request for re-assessment of the Bill of Entry. Since the benefit of Notification would be claimed at any stage this reassessment was required to be done by the proper officer and the refund of the amount against such reassessment was required to be made as per the provisions of Section 27 of the Customs Act, 1962."
6. In the above referred decision, reliance has also been placed upon the C.B.E.C's Customs Manual when the Bench has observed as under:
"The said position of law has been accepted by the C.B.E.C. in CBEC's Customs Manual of instructions issued on 11.9.2001. In Chapter 15 of the said Manual, it has been clarified that even in cases where excess payment of duty has been made due to incorrect assessment by the Customs authorities. The importer must file a claim under Section 27 of the Customs Act for refund of the excess amounts. The relevant portion of the Manual is reproduced herein below:
'On import and export of goods, at times, it is found that the duty has been paid in excess of what was actually leviable on the goods. Such excess payment may be due to lack of information on the part of the importer/exporter or non-submission of documents required for claim of lower value or rate of duty. Sometimes, such excess payment of duty may be done to shortage/short-landing, pilferage of goods or even incorrect assessment of duty by Customs. In such cases, refund of excess amount of duty paid can be claimed by the importer or exporter. If any excess interest has been paid by the importer/exporter on the amount of duty paid in excess, its refund claim also be claimed Section 27 of the Customs Act, 1962 refers in this regard.'"
(Emphasis supplied)
7. Accordingly, it was observed that the issue is fully settled by the Board itself and the Revenue cannot act against the instructions of the Board. The Bench observed as under:
"(f) In this view of the matter, the judgment of the Hon'ble Supreme Court in the case of Flock India Pvt. Ltd., 2000 (71) ECC 4 (SC) : 2000 (120) ELT 285 would not be relevant to deny the benefit of the refund if otherwise due under Section 27 of the Customs Act as that decision was rendered by a Division Bench of the Hon'ble Apex Court in the case of refund under the Central Excise Act, it is not found that the provisions of Section 11B of the Central Excise Act and Section 27 are paremateria, The facts in this case were totally different. The later decision issued by a Full Bench of Three Members of the Hon'ble Supreme Court in the case of Karnataka Power Ltd., 2000 (143) ELT 482 would therefore be the correct interpretation of law on refunds under Section 27 of the Customs Act, 1962."
8. Inasmuch as the issue is decided in favour of the appellants by the above Division Bench's decision (to which I was a party), following the ratio of the same, I set aside the impugned order and allow the appeal with consequential relief to appellants.