Custom, Excise & Service Tax Tribunal
Cipla Ltd vs Commissioner Of Customs on 12 November, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.C/85922/13 (Arising out of Order-in-Appeal No.465/Mumbai-III/2012 dated 21/11/2012 passed by Commissioner of Customs (Appeals), Mumbai) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) 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 :Yes 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? ========================================
Cipla Ltd., Appellant Vs. Commissioner of Customs (ACC & Import), Mumbai Respondent Appearance: Ms.Srinidhi Ganeshan, Advocate for appellant Shri.SWenthil Nathan, Dy. Comm. (AR), for respondent CORAM: Honble Mr. Ramesh Nair, Member (Judicial) Date of Hearing : 12/11/2014 Date of Decision : 12/11/2014 ORDER NO Per: Ramesh Nair
1. The appeal is directed against Order-in-Appeal No.465/Mumbai-III/2012 dated 21/11/2012 passed by Commissioner of Customs (Appeals), Mumbai, by which the Commissioner has upheld the order-in-original.
2. The fact of the case is that the appellant filed a Bill of Entry No.490634 dated 31/03/2010 for import of Fermoterol Fumarate for home consumption. The appellant paid excess CVD @ 10% instead of effective rate of 4% in terms of unconditional exemption Notification No.4/2006-CE dated 01/03/2006 (Sl.No.62C. The appellant filed a refund application for an amount of Rs.1,33,779/- towards the excess paid duty which was rejected by the Assistant Commissioner of Customs on the ground that the appellant has not challenged the assessment of bill of entry, following the ratio of the judgement in the case of CCE Vs.Flock India 2000 (120) ELT 285 (SC) and Priya Blue Industries Ltd 2004 (192) ELT 145 (SC). In an appeal against the said order-in-original, the Commissioner (Appeals) upheld the order-in-original. Thus, the appellant is before me.
3. Ms.Srinidhi Ganeshan, the learned Counsel for the appellant submits that there is no dispute as regards the admissible rate of CVD that is 4% by either side. The appellant has paid 10% CVD due to oversight. The notification prescribing 4% CVD is unconditional. Therefore, there is no dispute as regards the applicability of 4% CVD between the appellant and the department. Under this fact, it is not a case where the assessment is required to be challenged in order to claim the refund of excess paid duty. As regards the Revenues reliance on Flock India and Priya Blue Industries case (cited supra), she placed reliance on the decision of Honble High Court of Delhi in the case of Aman Medical Products Ltd. Vs. CC, Delhi 2010 (250) ELT 30 (Del) wherein both the said Honble Apex Court judgements have been distinguished. The learned Counsel submits that the facts of the Aman Medical Products Ltd. case is absolutely identical to the facts of the present case. She also relied on judgements in the case of Bennet Coleman & Co. Ltd. Vs. CC Bangalore 2008 (232) ELT 367 (Tri Bang) wherein the issue involved was the assessee had not claimed the exemption Notification No.20/2006-Cus and paid higher duty and subsequently claimed the refund, the Revenue had rejected the claim on the ground of non challenging the assessment order. The Tribunal held that since unconditional exemption Notification was not disputed there was no need to challenge the assessment. Rather exemption Notification could have been extended by the departmental officers itself. The Tribunal also held that this is rectifiable omission under Section 154 of the Customs Act. She also placed reliance on the decision in the case of Sesa Goa Ltd. Vs. CCE, Goa 2010-TIOL-1729-CESTAT-Mum.
4. On the other hand, the Deputy Commissioner (AR) appearing for the revenue reiterates the findings of the Commissioner (Appeals). He also submits that the judgement of Aman Medical Products Ltd. has been challenged by the Revenue before the Honble Supreme Court which is pending, therefore, the issue has not attained finality.
5. I have carefully considered the submissions made by both the sides.
5.1 In the present case, there is no dispute that at the material time of import the effective rate of CVD was 4% by notification No.4/2006-CE and the appellant has paid excess duty of 10% by oversight. Even though the Revenue has not disputed that the effective rate of duty was 4%, this fact clearly established that there is no dispute between the appellant and the Revenue as regards the effective rate of CVD. The lower appellate authority has rejected the claim, applying the ratio of Flock India and Priya Blue Industries case (cited supra). However, both these Apex Court judgements have been distinguished in Aman Medical Products Ltd. case by Honble High Court of Delhi. The relevant operative part of the judgement is reproduced below:
? 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.
5.2 From the above judgement of the Honble Delhi High Court, it is settled that where the duty was taken mistakenly. There is no dispute that the duty was paid in excess to what was required to pay. There is no need to challenge the assessment of the Bill of Entry. The refund of excess paid duty is admissible. In the above judgement also the facts of case are identical. In another case of Bennet Coleman & Co. Ltd., - 2008 (232) ELT 367 (Tri-Bang) held as under:
7.?We have gone through the records of the case carefully. The appellants imported Newsprint and filed the Bills of Entry. The assessment is carried out by the assessing officer. When the goods are subjected to Customs Duty, it is the responsibility of the assessing officer to correctly assess the goods to duty. The importer, in the Bill of Entry, furnishes the description of the goods. He also submits documents like invoice, packing list, technical literature, bill of lading, etc. so that correct assessment is carried out. Generally, assessment involves classification of the goods, valuation and applying the correct rate of duty taking into account the exemption notifications. The import of the goods with regard to the Import-Export Policy is also to be examined. The word assessment includes all the above. As regards the rate of duty, the Tariff Schedule against the description of the goods mentions the rate of duty. However, in certain cases, the goods are unconditionally exempted by virtue of certain exemption notifications. In other cases, the exemption from duty, either partial or complete, is dependent on certain conditions. For example, in certain cases, the importer is expected to furnish certificates from competent authorities. It should be borne in mind that assessment to Customs Duty is a highly technical job and only an officer, who is fully acquainted with the legal provisions and procedures, can competently complete the assessment without loss of revenue or depriving the importer of any benefit intended by an exemption notification.
7.1?In this case, it is not in dispute that the impugned goods are unconditionally exempt from the Additional Duty (Imports) by virtue of Notification No. 20/2006 dated 1-3-2006. The appellants have stated that they had banked upon the expertise of the Custom House Agent and also the assessing officers. Consequent to the assessment, they paid duty to the tune of Rs. 21,61,129/- This is a huge sum. The Notification is unconditional. Is it not incumbent on the part of the assessing officer to take into account the said notification? Obviously, in the present case, there is negligence on the part of the assessing officer. We cannot say that the assessing officer applied his mind to the facts and consciously took a decision to levy Additional Duty. This is a case of sheer omission on the part of the assessing officer.
7.2?In the Final Order Nos. 1413 to 1416/2007 dated 12-12-2007 quoted by the Revenue, the importer was supposed to file a Certificate for claiming the exemption at the time of import. He failed to file the Certificate. The assessment was completed. Later, the Certificate was obtained and the said importer claimed refund. In that case, this Bench, followed the decision of the Larger Bench in the case of Eurotex. Therefore, the facts of that case decided by this Bench are distinguishable from those of the present case.
7.3?The Honble Apex Court, in the case of Shree Hari Chemicals v. UOI & Anr. - 2006 (193) E.L.T. 257 (S.C.), had observed that there was an obligation on the part of the Department to extend relief given by an unconditional exemption Notification and the same could not be refused merely because the appellants had omitted to claim that relief. Therefore, one cannot blindly apply the ratio of the Priya Blue case and also the Larger Bench decision of Eurotex case to the facts of the present case. In fact, in the case of G.S Metalica (cited supra), the Tribunal held the view that when the goods are assessed to higher Customs Duty only on account of omission by the assessing officer to take note of the relevant customs notification, the same can be corrected under Section 154 of the Customs Act, 1962 without taking recourse to appellate remedies provided in the Customs Act. While taking this view, the Tribunal has followed the ratio of VST Industries Limited - 2007 (207) E.L.T. 513 (T) = 2007 (5) S.T.R. 59 (T) of the same Tribunal wherein the ratio of the Apex Courts judgment in the cases of Flock (India) Ltd. and Priya Blue have been distinguished. In these circumstances, we are of the considered view that the omission can be corrected under Section 154 of the Customs Act, 1962. Therefore, the appellant is rightly entitled for the refund of the amount, which was collected without extending the benefit of an unconditional exemption notification. For the fault of the assessing officer, if the importer is compelled to pay huge revenue, it would definitely amount to mis-carriage of justice. Hence, we allow the appeal.
5.3 The present case of the appellant is squarely covered by the above judgements. As regards the Revenues contention that judgement of Aman Medical Products Ltd. has been challenged before the Honble Supreme Court is observed that though the Revenue has filed before the Supreme Court, the Apex Court has not granted the stay of operation of the order of the Honble High Court of Delhi. Therefore, the said judgement of the Delhi High Court is binding on me.
6. In view of the above judgements, which is on identical facts, I am of the view that the appellant is rightly entitled for refund of excess paid CVD. The order of the lower appellate authority is set aside. The appeal is allowed with consequential relief, if any. Needless to say that the sanctioning authority must verify the aspect of unjust enrichment before sanction of the refund. The appeal is disposed of in the above terms.
(Dictated in Court) (Ramesh Nair) Member (Judicial) pj 1 8