Custom, Excise & Service Tax Tribunal
The Commissioner Of Customs & Central ... vs M/S. Billion Wealth Minerals Pvt. Ltd on 10 August, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT BANGALORE Appeals Nos: C/607 & 608/2009 and C/652 to 657/2009 (Arising out of Order-in-Appeal Nos. 18 & 19/2009(G)Cus dated 18.09.2009 and 20, 21, 22, 23, 24 & 25/2009(G)Cus. dated 12.10.2009 passed by the Commissioner of Customs & Central Excise, Guntur) 1. Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? The Commissioner of Customs & Central Excise Appellant Vs. M/s. Billion Wealth Minerals Pvt. Ltd. M/s. General Nice Minerals Resources (India) Pvt. Ltd. M/s. Ashapura Minechem Ltd. M/s. R.B. Seth Shreeram Narsingdas Respondents
Appearance Shri M. Vivekanand, SDR, for the Revenue-appellant S/Shri Jitendra Singh and S. Vijayaragavan, Advocates, for the Respondents CORAM MR. M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. P. KARTHIKEYAN, HONBLE MEMBER (TECHNICAL) Date of Hearing:10.08.2010 Date of decision:10.08.2010 FINAL ORDER Nos._______________________2010 Per P. Karthikeyan These are appeals filed by the Revenue. The orders impugned in the appeals passed by the Commissioner (Appeals) vacated orders of the Original Authority. Each such order of the Original Authority had denied refund of excess duty paid by the respondents on export of iron ore. Details of the appeals are given below:-
Appeal No. OIA OIO Material period Amount involved (Rs.) C/607/2009 18/2009 18.09.2009 22/2009-R 27.02.2009 2008-09 36,77,475/-
C/608/2009 19/2009 18.09.2009 31/2009-R 05.03.2009 2008-09 44,18,140/-
C/652/2009 20/2009 12.10.2009 34/2009-R 06.03.2009 2008-09 5,51,773/-
C/653/2009 21/2009 12.10.2009 19/2009-R 27.02.2009 2008-09 12,41,314/-
C/654/2009 22/2009 12.10.2009 29/2009-R 05.03.2009 2008-09 12,35,672/-
C/655/2009 23/2009 12.10.2009 20/2009-R 27.02.2009 2008-09 25,99,379/-
C/656/2009 24/2009 12.10.2009 21/2009-R 27.02.2009 2008-09 22,48,920/-
C/6572009 25/2009 12.10.2009 36/2009-R 16.03.2009 2008-09 20,14,147/-
2. The facts of the case are that the respondents had exported consignments of iron ore and paid duty on the FOB value, (i) as declared on their own in the respective shipping bills, or (ii) as in the case of M/s. R.B. Seth Shreeram Narsing Das (Appeal No. C/607/2009), after the department rejected the value declared by the assessee considering the sale price as inclusive of duty. The assessing officer had endorsed on the shipping bills (except in one case) that the assessment of duty was provisional. The value was subject to ascertainment of the Fe content, moisture, etc. The respondents were liable to pay differential duty depending upon the eventual determination of export price.
2.1. After export, the respondents claimed refund on the basis that the relevant value had to be determined treating the FoB value as inclusive of the duty paid and that excess duty was paid when duty was assessed on FOB value. CBEC had issued a Circular No. 18/2008 dated 10.11.2008 to the effect that the assessable value had to be so computed from the FOB value, which was not against the relevant legal provisions. Government had taken a policy decision to adopt the FOB value as the assessable value in respect of exports made w.e.f. 1.1.2009. Accordingly, the respondents claimed the excess duty paid for the consignments exported prior to 01.01.2009.
2.2. All the claims were rejected by the Original Authority on the ground that the respondents had not challenged the assessment of duty of the respective consignments for export. In the light of the Apex Courts judgment in the case of Collector of Central Excise, Kanpur Vs. Flock India Pvt. Ltd. [2000 (120) ELT 285(SC)] and Priya Blue Industries Ltd. Vs. Commissioner of Customs [2004 (172) ELT 145(SC)] he held that the refund claims filed could not be allowed unless the order of assessment had been successfully challenged. He rejected the plea of the respondents that the export consignments remained to be finally assessed, as the sale price was subject to price variation depending on Fe content and moisture content. The Original Authority held that the dispute involved viz. determination of value considering the sale price as inclusive of duty, the assessment was final. He held that the Circular No. 18/2008 dated 10.11.2008 did not indicate any legal infirmity in adopting the FOB value as assessable value. The instructions applied only to pending assessments and not to the impugned cases where the assessment had already been finalized.
3. The impugned orders are passed on identical legal grounds. The Commissioner found that the shipping bills involved had not been finally assessed. The assessment of these Shipping Bills was conditional. Filing of refund claim itself constituted challenge of assessment. Refund claim could not be rejected irrespective of whether the assessment was final or provisional. Any omission in assessment could be corrected in terms of Section 154 of the Customs Act, 1962 (the Act). Following the same reasoning as adopted in one of his previous orders viz. Order-in-Appeal No. 07/2009(G)Cus. dated 12.08.2009, the Commissioner(Appeals) set aside each of the orders of the Original Authority impugned before him and allowed the appeals filed by the respondents with consequential relief.
4. Reiterating the grounds taken in the appeal, during hearing, the learned SDR argued that the shipping bills involved were not assessed provisionally. He relied on a decision of the Tribunal in Glencore India Ltd. Vs. CC, Nhava Sheva [2004 (170) ELT 309 (Tri.-Mumbai)] in support of the claim that in the instant cases, procedure prescribed for ordering provisional assessment had not been followed and, therefore, the assessments were not provisional. He also relied on a decision of the Tribunal in the case of CC(Imp.), Mumbai Vs. L.K. Steel Factory P. Ltd. [2008 (225) ELT 113(Tri.-Mumbai)] to support the claim that the Commissioner (Appeals) had erred in allowing refund without the assessee successfully challenging the assessment and that Section 154 did not envisage rectification of such mistakes which entailed refund or demand of duty short levied, covered respectively by sections 27 and 28 of the Act.
5. The respondents relied on Final Order No. 830/2010 dated 19.05.2010 in the case of CC, Guntur Vs. M/s. Sameera Trading Company which had rejected a similar appeal of the Revenue. The respondents also relied on a decision of the Tribunal in the case of Orient Pre-Stressed Products (P) Ltd. Vs. Collector of Central Excise, Allahabad [2003 (159) ELT 1181(Tri.-Del.)] to fortify their plea that when the contract governing the transaction contained price variation clause, the provisionality attached to the price applied to the entire assessment. Therefore, the impugned assessments were provisional.
6. We have carefully perused the case records and considered the rival submissions. As regards the submission that the assessment involved could not be held to be provisional as argued by the learned SDR, we note that the Tribunal had dealt with a case where the relevant file of the department dealing with the assessment of Bill of Entry contained dubious notings from which the Tribunal discerned an attempt to change complete assessments to provisional assessments. There were interpolations and doubtful forging or and fudging of records made to conceal the nature of assessment ordered earlier. The endorsement of Bill of Entry having been assessed provisionally appeared on a photocopy of the original Bill of Entry No. 328915, but no such stamp was affixed on the triplicate copy of the very same Bill of Entry dated 29.12.1999. The absence of such stamp on the original Bill of Entry had raised grave and serious doubts. We find that it was in these circumstances that the Tribunal came to a conclusion that in the absence of authorities following the procedure prescribed in Customs Appraising Manual for ordering provisional assessment, the said case could not be held to have been provisionally assessed.
7. We also find that the cases before us are similar to the Central Excise case considered by the Tribunal in the Orient Pre-stressed products P. Ltd. (supra). In that case, the price for the transaction remained to be finalized at the time of clearance of goods. Therefore, we find that the Commissioner rightly held that there was no final assessment to be challenged before seeking refund in terms of ratio of the judgment of the Apex Court in the Priya Blue case (supra) and the Flock India case (supra).
8. We observe that we have already decided a similar dispute in the case of CC, Guntur Vs. M/s. Sameera Trading Company, vide Final Order No. 830/2010 dated 19.05.2010. Our findings in the above order are reproduced below:-
4. We have carefully perused the case records and considered the rival submissions. The facts of the case are that the respondents, M/s Sameera Trading Company have exported 53,900 MTs of Iron Ore fines under shipping bill No. 64/08-09 dated 09.8.08. They paid export duty of Rs. 3,74,43,899/- on 11.8.08. Further, the exporter paid an additional amount of Rs. 2,08,408/- following chemical test of the sample for determining the Fe content and moisture content in the Ore. The Assistant Commissioner had assessed the duty liability on the export consignments taking FOB value as transaction value material for payment of duty. On 10/11/08, CBEC issued a Circular indicating that a policy decision had been taken that till 31/12/08, the existing practice of computation of export duty and cess by taking the FOB value as cum-duty price may be continued and directed to finalize all the pending cases accordingly. The respondents accordingly filed refund claim for the excess duty paid considering the FOB value as cum-duty value. After due process of law, the Assistant Commissioner rejected the refund claim on the ground that the respondents had not challenged the assessment on the shipping bill. In taking such a decision, he followed the Apex Court judgment in the case of Collector of Central Excise, Kanpur Vs. Flock India Pvt. Ltd. [2000 (120) E.L.T. 285 (S.C.)] and decision of the Tribunal in the case of Super Cassettes Industries Ltd. Vs. Commissioner of Customs, Kolkatta [2003 (162) E.L.T. 1148 (Tri. Del)]. He also observed that re-assessment of the shipping bill under Section 17 (4) of the Customs Act, 1962 (the Act) ordered on the shipping bill was for the limited purpose of revising liability following the ascertainment of exact Fe content and moisture content in the Ore. He also observed that Circular cited by the respondents did not apply to the assessments already finalized.
5. We find that the impugned order relied on the following case laws to allow the appeal filed before him :
(i) I.P Rings Ltd Vs. CE (AIR), Chenna [2006 (202) E.L.T. 61 (Tri. Chennai)
(ii) Senka Carbon Pvt. Ltd. Vs. CC, Chennai [2007 (216) E.L.T. 397 (Tri. Chennai)]
(iii) Birla Jute Manufacturing Company Ltd. vs. CC, Calcutta [1984 (15) E.L.T. 179 (T) The Commissioner found that the refund claim could not be rejected for the reason that order of assessment was not challenged and that, that omission could be corrected under Section 154 of the Act.
6. We find that the Original authority had assessed the impugned shipping bill contrary to the legal provisions. In the Circular No. 18/2008 dated 10/11/2008 issued by CBEC, it was clarified that by taking the FOB price declared by the exporter as cum-duty price and working backwards from the FOB price to determine the value for assessment was a practice followed for the last more than three decades. This practice was consistent with the statutory provisions. In the light of the above clarification, the original authority wrongly assessed the export duty on the impugned consignments taking the FOB value as transaction value. The excess duty claimed by the respondents considering the FOB price as cum-duty price is in accordance with law and the original authority should have allowed the refund. Vide the impugned order, the Commissioner noted the legal position in this regard and observed that the error could be corrected invoking provisions of Section 154 of the Act and by reassessing the shipping bills under Section 17 (4) of the Act.
6.1 We find that the Apex Court observed as follows in Flock India Pvt. Ltd. case (supra) :
Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an 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 the adjudicating authority had committed an error in passing his order. The above judgment was concerned with the provisions relating to refund under the Central Excise Act. The ratio applies to refund claims under the Customs Act as well. However, Section 27 dealing with refund, etc. does not override the provisions of other Sections of the Act.
6.2 Section 154 of the Act reads as under :
Correction of clerical errors, etc. Clerical or arithmetical mistakes in any decision or order passed by the Central Government, the Board or any officer of customs under this Act, or errors arising therein from any accidental slip or omission may, at any time, be corrected by the Central Government, the Board or such officer of customs or the successor in office of such officer, as the case may be.
7. We find that it was the onus of the assessing officer to correctly quantify the duty liability on the export consignment. He had committed an error in computing the export duty considering the FOB value as transaction value. It was with in his competence to correct the error invoking Section 154 of the Act as held by the Commissioner (Appeals).
7.1 In Senka Carbon Pvt. Ltd. Vs. C.C., Chennai [2007 (216) E.L.T. 397 (Tri. Chennai)] the Tribunal held as follows :
2. . Once the imported goods were correctly declared in the Bills of Entry, it was the duty of the proper officer of customs to assess the duty due. Therefore, if the assessing officer committed a mistake, the same should be corrected and if any excess amount was collected pursuant to wrong assessment, that amount should be refunded. There was no need for the importer to challenge the assessment to obtain the refund of the excess amount paid. In VST Industries Ltd. Vs. Commissioner of Customs, Mumbai [2007 (207) E.L.T. 513 (Tri. Mumbai)] case, the facts were that the appellant had paid excess duty by adopting the FOB value as transaction value instead of C & F value. The claim for refund of duty paid on excess freight was denied by the authorities following the decision of the Apex Court in the case of Collector Vs. Flock India Pvt. Ltd. [2000 (120) E.L.T. 285 (S.C.)] and Priya Blue Industries Ltd. Vs. Commissioner [ 2004 (172) E.L.T. 145 (S.C.)]. The Tribunal observed as follows while allowing the appeal filed by the assessee.:
4. A bare perusal of the above provisions makes it clear that no obligation has been cast on the appellant to make an application under the said section. The authorities mentioned therein are themselves competent to take note of any accidental slip or omission and correct thereafter at any time. Thus, the above provisions give enough power to the authorities mentioned therein without any limitation for carrying out the necessary corrections. Therefore, to say that the appellant has failed to move an application under Section 154 may not be legally correct. I, therefore, consider it necessary to remand the matter to the adjudicating authority for fresh adjudication and to pass a fresh speaking order in the matter after taking into consideration the provision of Section 154 of the Customs Act, 1952, particularly when the provisions of this section have not been considered in the aforementioned decisions of the Honble Supreme Court. In another case of rejection of claim for refund of excess duty paid by the appellants, in M/s Aditya Birla Nuvo Ltd. [2008 (222) E.L.T. 249 (Tri. Bang.)] case, following the ratio of the judgments of the Apex Court in Flock India Pvt. Ltd. (supra) and Priya Blue Industries Ltd (supra), the Tribunal held that the appellants were entitled to claim reassessment in terms of their refund application. The appeal was allowed by remand to the original authority. The Tribunal had followed the decisions in the case of Karnataka Power Corporation Ltd. Vs. Commissioner [2002 (143) E.L.T. 482 (S.C.)] and Jindal Vijayanagar Steels Ltd. Vs. Commissioner [2006 (206) E.L.T. 529 (Tribunal)]. We also note that in this case excess amount of duty was paid owing to a mistake in the calculation of the duty. The Tribunal in the case of Commissioner of Customs, New Delhi Vs. Hero Honda Motors Ltd. [2008 (220) E.L.T. 482 (Tri. Del.)] allowed the appeal filed by the assessee with the following findings :
11. Section 154 of the Customs Act reads as under :-
Section 154. Correction of clerical errors, etc. - Clerical or arithmetical mistakes in any decision or order passed by the Central Government, the Board or any officer of customs under this Act. or errors arising therein from any accidental slip or omission may, at any time, be corrected by the Central Government, the Board or such officer of customs or the successor in office of such officer, as the case may be.
On a plain reading it is manifest that not only clerical or arithmetical mistake in any decision or order, but errors arising from any accidental slip or omission may, at any time, be corrected by the concerned authority. In the facts of the case, briefly noted above, we are satisfied that the mention of serial No. 281 instead of serial No. 337 was an accidental slip on the part of the respondent leading to mistake in the calculation of duty and the respondent should not be denied the benefit of the remedy under Section 154. We are of the view that the decisions of Supreme Court relied upon on behalf of the Revenue cannot be applied in cases covered by Section 154 of the Act and where refund is the logical consequence of correction of some clerical or accidental error under Section 154, the person should not be denied the benefit merely because he did not prefer appeal against the assessment order. What benefit he is actually entitled to, as a consequence, is to be considered by the Proper Officer. In another decision of the Tribunal in the case of I.P. Rings Ltd. Vs. Commissioner [2006 (202) E.L.T. 61 (Tri.)] cited by the respondents, the Tribunal in a similar case of erroneous assessment and collection of higher amount of duty, directed the assessing officer to reassess the Bill of Entry under Section 17 (4) of the Act after allowing the assessee to amend the Bill of Entry under Section 149 of the Act.
8. We find that the impugned order is consistent with a plethora of the judicial authorities, a few of which are discussed above. In the circumstances, we find no merit in the appeal filed by the Revenue and reject the same.
9. We do not find any reason to take a different view in the subject cases. We had decided an identical dispute in the Sameera Trading Co. case. We reject these appeals filed by the Revenue, following our decision in the above case in our Final Order No.830/2010 dated 19.05.2010.
(Operative portion of the Order pronounced in open Court on conclusion of hearing on 10.08.2010) (P. KARTHIKEYAN) Member (T) (M.V. RAVINDRAN) Member (J) /pr/