Custom, Excise & Service Tax Tribunal
Petronet Lng Limited vs Ahmedabad on 1 August, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
West Zonal Bench AHMEDABAD
COURT NO. I
Appeal No. C/10488/2017-DB
Date of Hearing : 19.07.2018
Date of Decision : 01.09.2018
[Arising out of Order-in-Appeal No. OIA-AHM-CUSTM-000-APP-064-16-17 dated
02.01.2017 passed by Commissioner (Appeal) Customs, Ahmedabad]
M/s. Petronet LNG Limited : Appellant
vs.
Commissioner of Customs, Ahmedabad : Respondent
Appearance:
Shri Sujit Ghosh, Advocate for the Appellant Shri L. Patra, Assistant Commissioner (AR) for the Respondent CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Hon'ble Mr. Raju, Member (Technical) Final Order No. A/11614 / 2018 Per : Ramesh Nair The brief facts of the case are that the appellant have imported certain quantity of LNG during the period from June 2012 to December 2012. The amount involved is Rs. 9,59,27,205/-. Respective bills of entries filed were assessed provisionally, considering the quantity mentioned in the respective bills of lading and where there was short receipt of quantity as against the quantity mentioned in the bills of lading. Later on, at the time 2 Appeal No. C/10488/2017 of final assessment, the quantity mentioned in the respective bills of lading was considered and the actual quantity imported was not considered and the bills of entries were assessed finally. Being aggrieved by the final assessment, the appellants filed appeal before the Commissioner (Appeal) who held that Customs duty should be calculated on the quantity of LNG actually imported into India and the final assessment should be done on the basis of on shore receipt quantity and not on the basis of quantity mentioned in the bills of lading and accordingly, allowed the appeal vide order-in-appeal dated 04.12.2013. Being aggrieved with the said decision, the department preferred appeal before this Tribunal and the same was rejected vide order dated 08.09.2014. Thereafter, the appellant filed claim for refund of differential duty. The refund claim was rejected by the Adjudicating Authority on the ground that the appellant became eligible for refund after the order-in-appeal dated 04.12.2013 passed by Commissioner (Appeal) whereas, the refund claim was filed by the appellant on 09.09.2015. Therefore, the refund claim was held as time barred as the same was filed beyond one year from the relevant date. Being aggrieved by order-in-original dated 04.12.2015, the appellant filed appeal before the Commissioner (Appeal) who agreeing with the findings of the original authority, rejected the appeal filed by the appellant and upheld the order-
in-original, therefore, the present appeal.
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2. Shri Sujit Ghosh, ld. Counsel appearing on behalf of the appellant submits that the refund amount is towards the duty paid in respect of quantity of LNG which was not at all imported into India. Therefore, the quantity which was not imported was not liable for duty and hence, the amount paid on such short landed quantity cannot be treated as duty and therefore the refund of the same is not governed by Section 27 of the Customs Act, 1962. Consequently, limitation under Section 27 is not applicable in the facts of the present case. He alternatively submits that the issue whether on the short landed quantity of LNG duty is payable or otherwise, the same was finally decided by this Tribunal vide order dated 08.09.2014 which was received by the appellant on 29.09.2014. The refund claim was filed on 09.09.2015 therefore, from the date of receipt of Tribunal's order deciding the dispute on merits, refund claim was filed well within one year time i.e. 09.09.2015. Therefore, even if one year period is taken, the refund claim was filed within stipulated period of one year from the relevant date. For this reason also, the refund is not time-barred. In support of his above submissions he relied on the following judgments:-
(a) Star Textile Engg. Works Limited vs. Collector of Customs, Bombay
- 1985 (22) ELT 552 (Tribunal).
(b) Petronet LNG Limited vs. CC, Ahmedabad - 2012 (275) ELT 568 (Tri. Ahmd.)
(c) Board of Turtees of The Port of Mormugao vs. UOI - 1993 (68) ELT 39 (Bom.)
(d) Godrej & Boyce Mfg. Company Limited vs. Collector of Customs -
2001 (134) ELT 429 (Tri. Mumbai) 4 Appeal No. C/10488/2017
(e) Joshi Technologies International vs. UOI - 2016 (339) ELT 21 (Guj.)
(f) Vikas Globalone Limited vs. CC, Nhava Sheva - 2014 (302) ELT 272 (Tri. Mumbai.)
(g) Shakun Overseas Limited vs. CC, (Chennai - 2013 (297) ELT 14 (Mad.)
3. On the other hand Shri L. Patra, ld. Assistant Commissioner (AR) appearing on behalf of the Revenue reiterated the findings of the impugned order. He submits that every refund claim in the Customs Act has to be passed through the provisions of Section 27 of the Customs Act. There is no other mechanism provided for refund under the Customs Act. Therefore, limitation provided under Section 27 is inevitably applicable for each and every refund matters. As regards the submission of ld. Counsel that the refund claim was filed within one year from the date of receipt of order of the Tribunal, after deciding the issue on merit, he submits that the issue on merit was decided in favour of the appellant by the Commissioner (Appeal) vide order dated 04.12.2013. Thereafter, the appellant became eligible for refund and therefore, the period of one year shall be computed from 04.12.2013 and not from the Tribunal's order dated 08.09.2014 which was received on 29.09.2014. Therefore, even on this fact also, the refund was filed beyond one year from the relevant date. Hence it is clearly time barred.
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4. We have carefully considered the submissions made by both the sides and perused the record. We find that the limited issue to be decided by us is, whether refund claim filed by the appellant is governed by Section 27 of the Customs Act, 1962 and consequently it is time-barred or otherwise. We find that though the amount of refund claim is related to duty paid and the said amount is customs duty including the duty on the actual receipt quantity. Therefore, the entire amount paid by the appellant is nothing but customs duty only irrespective to the fact that certain portion of the duty was not payable. Under the Customs Act, any amount which is refundable has to pass the test provided under Section 27 of the Customs Act, 1962. In the said Act, there is no other provisions made for refund of any amount which was paid either without authority of law or was not payable for any reason. Therefore, all the refund claims under the Customs Act has to be dealt with under the provisions of Section 27. The departmental authority has no legal authority to process and sanction the refunds going out of Section 27 of the Customs Act, 1962. Therefore, the Customs authorities have to process and dispose the refunds only and only under Section 27 of the Customs Act, 1962. Though in the identical facts, the Hon'ble Bombay High Court in the judgment cited by ld. Counsel, in case of refund, in respect of duty paid on short imported goods held that limitation under Section 27 is not applicable. However, the Hon'ble Supreme Court in various judgments held that all the refund claims of customs and excise has to be governed by Section 27 of the Customs Act or Section 11B of the Central 6 Appeal No. C/10488/2017 Excise Act, 1944. In the case of Collector of Central Excise, Chandigarh vs. Doaba Co-operative Sugar Mills - 1988 (37) E.L.T. 478 (S.C.), the Hon'ble Apex Court held as under:-
"6. It appears that where the duty has been levied without the authority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light. But in making claims for refund before the departmental authority, an assessee is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail. It may, however, be open to the department to initiate proceedings in the Civil Court for recovery of the amount due to the department in case when such a remedy is open on the ground that the money received by the assessee was not in the nature of refund. This was the view taken by the Tribunal in a previous decision in the case of Miles India Ltd. v. The Assistant Collector of Customs but it was assailed before this Court. The appeal was withdrawn. This Court observed that the Customs Authorities, acting under the Act, were justified in disallowing the claim for refund as they were bound by the period of limitation provided therefore in the relevant provisions of the Customs Act, 1962. If really the payment of the duty was under a mistake of law, the party might seek recourse to such alternative remedy as it might be advised. See the observations of this Court in Miles India Ltd. v. The Assistant Collector of Customs [1987(30) E.L.T.641 (S.C.) = 1985 E.C.R. 289].
7. In the aforesaid view of the matter the Tribunal was right. The appeal, therefore, has no merits and it is accordingly not entertained and dismissed. There is no order as to costs."
From the above judgment, it is clear that even if there is refund of duty which was recovered without authority of law, the refund made before the departmental authority, limitation provided under Customs/Central Excise Act shall be applicable. The Hon'ble Supreme Court has held that authorities functioning under an Act is bound by its provisions and any refund proceedings beyond the limitation provided under the Customs/ Central Excise Act, the same can be initiated in the Civil Court. Accordingly, the time limit under the Customs Act is applicable. We are also of the view that the Tribunal being creature of the statue and under 7 Appeal No. C/10488/2017 Customs Act have to deal with any refund case within four corners of the Customs Act, since the provisions for refund is only provided under Section 27 of the Customs Act, 1962. This Tribunal also cannot by-pass the same and decide the refund claims under general law. The Hon'ble Supreme Court in a land mark judgment in the case of Mafatlal Industries Limited vs. UOI - 1997 (89) ELT 247 (SC) has endorsed the aforesaid judgment in the case of Doaba Co-operative Sugar Mills (supra). In the case of UOI vs. Namdang Tea Estate - 2004 (164) ELT 132 (SC), the Hon'ble Supreme Court held that claim filed beyond the stipulated time is not admissible. In the case of UOI vs. VIP Industries Limited - 1998 (101) ELT 8 (SC) the Hon'ble Supreme Court in the facts of the case held that assessee filing refund claim for past four years following a favourable decision on classification in the case of a manufacturer of similar goods, set-aside the Hon'ble High Court order which directed the Assistant Commissioner to consider the claim for beyond limitation period without taking into consideration the question of limitation. Accordingly, the High Court judgment was set-aside. In the case of Porcelain Electrical Manufacturing Company vs. Collector of Central Excise, New Delhi - 1998 (98) ELT 583 (SC), the Hon'ble Supreme Court held that refund claim filed before the departmental authorities to be governed by the time limit provided under the statute, general law of limitation not available. The decisions where assessee has invoked extraordinary jurisdiction of the High Courts and the Courts have applied the period of limitation of three years, the same is inapplicable to cases where the refund 8 Appeal No. C/10488/2017 application has been moved before the Revenue authority. The decision in the case Escorts Limited vs. UOI - 1998 (97)ELT 211 (SC), the Hon'ble Apex Court has held that application for refund is presented before the Customs authority under Section 27 of Customs Act, 1962, the said authority must necessarily operate within the four corners of the said Act and cannot have recourse to Section 72 of the Indian Contract Act, 1872 and the delayed application rightly rejected as time barred. The Hon'ble Supreme Court in the case of UOI vs. Amines and Plasticizers Limited held that refund claims filed beyond the period prescribed under Customs Act, 1962, the High Court order directing the Revenue to ignore the period of limitation and dispose of the refund claim stands set aside in the light of law declared in Mafatlal's case and the refund claim was held to be dismissed as barred by time. The Hon'ble Supreme Court in the case of UOI vs. Kirloskar Pneumatic Company
- 1996 (84) ELT 401 (SC) held that the High Courts under writ jurisdiction cannot direct the Customs authorities to ignore the time limit prescribed under Section 27 of the Customs Act, even though High Court itself may not be bound by the time limit of the said Section, Articles 226 and 227 of the Constitution of India. In view of the above judgment, only the High Court, under writ jurisdiction, can exercise the inherent power provided in it but the said power cannot be enjoyed by the Tribunal. In the case of Paros Electronics Pvt. Limited vs. UOI - 1996 (83) ELT 261 (SC), the Hon'ble Supreme Court held that customs authorities cannot grant refund, being a 9 Appeal No. C/10488/2017 creation of statute they are bound by limitation of Section 27 of the Customs Act.
5. On the analysis of above judgments of Hon'ble Supreme Court, the gist is that any refund filed before the Customs/ Central Excise authorities can only process the claim under Customs/ Central Excise Acts and the departmental authorities have no jurisdiction to go beyond the provisions made under the Act and limitations provided under Section 27/Section 11B.
6. As regards the alternative submissions made by ld. Counsel that refund claim was filed within time limit from the date of receipt of Tribunal order, we find that the issue on merits was already decided in favour of the appellant by the Commissioner (Appeal) vide order dated 04.12.2013, thereafter, the appellant became eligible for refund. Even though the department had filed appeal against the Commissioner (Appeal) order before the Tribunal but since no stay was granted, the departmental authority was bound to sanction the refund claim in terms of CBEC Circular 572/9/2001-CX dated 22.02.2001. The relevant para of the Circular is reproduced as under:-
"(3) The cases where refund arises due to order of Commissioner (Appeals) or Commissioner of Central Excise/Customs and decision is taken to contest them before CEGAT.
In such cases appeal/stay application should be filed expeditiously well before the expiry of stipulated period of three months (and not waiting for the last date of filing of appeal). However, no refund/rebate claim should be withheld on the ground that an appeal has been filed against the order giving the relief, unless stay order has been obtained. It would be the responsibility of the concerned Commissioner to obtain stay order expeditiously where the orders passed by Commissioner (Appeals) suffer from serious infirmities and it involves grant of heavy refunds." 10
Appeal No. C/10488/2017 Therefore, the period of one year shall be reckoned from the date of receipt of Commissioner (Appeal) order and not from the date of receipt of Tribunal's order.
7. For the refund claims arising out of order settling the dispute, there is specific provision made under Section 27(1B) which is reproduced below:-
"Section 27 - Claim of refund of duty: -
(1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely:--
(a) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order;
(b) where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction;
As per clause (b) of sub Section (1B) of Section 27, where the duty became refundable as a consequence of any judgment, decree, order or direction of the appellate authority, the limitation of one year shall be computed from the date of such judgment, decree, order or direction. In the present case, the demand of duty on short imported goods stands set- aside as per the order of Commissioner (Appeal) and as a consequence, the appellant become eligible for refund of the said amount. Therefore, in terms of clause (b) of sub-Section (1B) of Section 27, the period of one year 11 Appeal No. C/10488/2017 shall be computed from the date of Commissioner (Appeal) order. Accordingly, the refund application filed beyond one year from that date is clearly time barred.
8. The Hon'ble Supreme Court in the case of Dena Snuff Pvt. Limited vs. CCE, Chandigarh - 2003 (157) ELT 500 (SC) has held that in case of any dispute on merits, the period of limitation would start to run from the date of final decision in assessee's own case. In view of the above judgment also it is clear that appellant could have filed the refund claim within one year from the date of Commissioner (Appeal) order by which the dispute on demand of duty was settled.
In view of the above discussions, we are of the view that the departmental authority has no legal authority to sanction the refund filed beyond limitation. Accordingly, the impugned order is upheld and the appeal is dismissed.
(Order pronounced in the open court on 01.09.2018)
Raju Ramesh Nair
Member (Technical) Member (Judicial)
KL