Customs, Excise and Gold Tribunal - Calcutta
Mecon Ltd. vs Commissioner Of Customs on 11 November, 2002
Equivalent citations: 2003(87)ECC152, 2003(153)ELT574(TRI-KOLKATA)
ORDER S.S. Sekhon, Member (T)
1. The Appellants' bill of entry No. DI (A) 429 dated 31-1-96 filed for the import of certain instruments was assessed under heading 9027.10. Duty was accordingly paid and the goods cleared. Thereafter the appellants filed a claim for refund of the excise duty paid by them on the grounds that the goods are for analysis system which have been classified under heading 9027.10 with the benefit of Notfn. No. 60/95-Cus. at 25% basic duty and 10% countervailing duty instead of 50% basic and 20% countervailing duty as it was assessed.
2. The assessments made on the bill of entry were held to be final, since no appeal was filed against such assessments. Therefore subsequent claim of refund was rejected for lack of jurisdiction by the Asst. Commissioner.
3. The Commissioner (Appeals) while disposing of the appeal and rejecting the refund held that as the appellants neither applied to the initial assessments authority for re-assessments nor filed any appeal against the initial assessments of the bill of entry which is an appealable order and the duty were not paid under protest. Therefore the refund was rightly rejected.
4. The appellants have taken the grounds :-
(a) The appreciation of the provisions of Section 27 of the Customs Act has not been correctly done by the lower authorities. This section permits any person to make an application claiming refund of duty (and interest) "paid by him in pursuance to an order assessments" which would include an assessment made incorrectly. Section 27 provides for a procedure for making the claim for refund and the time limit provided therein. It has not stipulated the reasons or grounds on which the claim can be admitted or otherwise.
(b) Claim of refund arising out of the incorrect assessments under Section 27 of the Customs Act are to be distinguished from claims made on other grounds.
5. After hearing both the sides and considering the submissions we find :-
(a) Section 27 of the Customs Act, 1962 (in short the Customs Act) confers a statutory right to file Refund Claim of the duty paid in pursuance of an Order of Assessment and it reads Section 27(1) of the Customs Act, in so far as it is relevant for the purposes of this appeal, is set out herein below : -
"Section 27. Claim for Refund of Duty. - (1) Any person claiming refund of any duty and interest, if any, paid on such 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 Asst. Commr. of Customs or Deputy Commissioner of Customs-
(a) in the case of any import made by any individual for his personal use or by Govt. job 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........"
A Statutory right has been conferred upon the assessee to file Refund Application if he is claiming refund on any duty paid by him in pursuance of an Order of Assessment on a BE Section 27(1) thus statutorily provides for filing the Refund Claim in the following situation -
(i) There is an existence an Order of Assessment.
(ii) Duty has been paid by the assessee of such Order of Assessment.
(iii) The assessee claims refund of the said duty paid by him in pursuance of the Order of Assessment.
When the statutory right for filing claim for refund of duty paid in pursuance of an Order of Assessment has been conferred upon the Appellant by the specific provisions of Section 27 of the Customs Act, there can he absolutely no scope whatsoever of nullifying the said right by ignoring the aforesaid statutory provisions. The said section itself contemplates and provides that there must be in existence an Order of Assessment under which the duty in question was paid by the assessee.
(b) If a refund claim cannot be filed unless the Order of Assessment itself has been got set aside by filing a separate appeal against such Order of Assessment, the provisions of Section 27(1)(i) will be rendered totally nugatory and meaningless. An interpretation which reveals a provision nugatory has to be avoided.
(c) If the view as taken by the lower authorities is to be accepted, it would mean that refund claim can never be filed or allowed unless the Order of Assessment itself is separately appealed against and this has been set aside by the appellate authority in an independent appeal. In such a situation, the Refund Claim can never be filed for refund of the duty paid in pursuance of an Order of Assessment and the provisions of Section 27(1)(i) will be rendered totally meaningless and nugatory. When Section 27(1)(i) mentions about the duties paid in pursuance of "an Order of Assessment", it obviously means that an Order of Assessment is in existence and that the duty in question was paid in pursuance of such Order of Assessment.
(b) A full Bench of the Supreme Court in the case of Karnataka Power Corpn. Ltd. v. CC (Appeals) - 2002 (143) E.L.T. 482 has held in that case wherein the assessee :-
"... had imported Epoxy 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 No. 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 Col-
lector 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.
(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 reassessment of the bill of entry Since the benefit of Notfn. 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.
(d) In the case of M/s. Dunlop India Ltd. - 1983 (13) E.L.T. 1566 the Hon'ble Supreme Court had held as under :-
"40. On one stage Mr.. Sanghi pointed out that in certain Bills of Entry of Dunlop India Limited, their Agents, Messrs, MacKinnon, Mackenzie & Co. Private Ltd., gave the I.C.T. Item No. 87 with regard to the imported V.P. Latex. This, according to Mr. Sanghi, clearly shows how the appellants themselves have understood the matter. There is, however, no estoppel in law against a party in a taxation matter. In order to clear the goods for the customs, the appellants Agents may have given the classification in accordance with the wishes of the authorities or they may even be under some misapprehension. But when law allows them the right to ask for refund on a proper appraisement and which they actually applied for, we do not attach any significance to this aspect of the matter pointed out by the counsel. The question is of general importance and must be decided on its merits."
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 produced herein below :-
"Or 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).
(e) Thus the issue now is fully settled by the Central Board of Excise and Customs itself and the Revenue cannot lead against these instructions of the Board. This is settled position of law.
(f) In this view of the matter the judgment of the Hon'ble Supreme Court in the case of Flock India Pvt. Ltd. - 2000 (120) E.L.T. 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 pari materia. The facts in this case were totally different. The later decision issued by a full Bench of three Members of the Supreme Court in the case of Karnataka Power Ltd. - 2002 (143) E.L.T. 482 would therefore be the correct interpretation of law on refunds under Section 27 of the Customs Act, 1962.
6. In this view we find no reason to sustain the orders of the lower authorities. Order of the lower authorities is set aside. The original authority should determine the refunds if admissible under Section 27 of the Customs Act, 1962. Appeal disposed of in above terms.