Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Bangalore vs Sundaram Fasteners Ltd. on 25 June, 2024
Customs Appeal No. 20337 of 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
BANGALORE
REGIONAL BENCH - COURT NO. 3
Customs Appeal No. 20337 of 2022
[Arising out of Order-in-Appeal No. 141/2022 dated 07.02.2022 passed by the
Commissioner of Customs (Appeals), Bangalore]
Commissioner of Customs
City Customs Commissionerate
C.R. Building, Queen's Road Appellant(s)
P.B. No. 5400
Bengaluru - 560 001
VERSUS
M/s Sundaram Fasteners Ltd.
Metal Forms Division Respondent
Harita, Hosur - 635 109 APPEARANCE:
Mr. Rajesh Shastry, AR for the Appellant Mr. P.R. Renganath, Advocate for the Respondent Coram:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Final Order No.: 20508 / 2024 Date of Hearing: 07.06.2024 Date of Decision: 25.06.2024 Per: P.A. Augustian Issue in the present appeal is regarding refund of Additional Duty of Customs (CVD) demanded from the respondent after introduction of GST on imported goods. The respondent had exported automobile components and availed drawback of Rs. 2,81,327/-. Thereafter portion of the components exported by the respondent returned by USA customers and on arrival, respondent repaid the drawback received with interest of Rs. 37,494/- and requested for Page 1 of 4 Customs Appeal No. 20337 of 2022 waiver of other duties as per Notification No. 46/2017 dated 30.06.2017. Due to introduction of CGST, payment of CVD was not applicable. However due to system error, appellant insisted the respondent to pay CVD of Rs. 18,66,365/- including E cess, SHE cess.
Thereafter, appellant allowed release the goods on executing bank guarantee of Rs. 32,35,605/- and on execution of bond equivalent to value of goods. Goods were subjected to open examination by appellant on re-importation and confirmed that goods are the same exported by the respondents. On completion of re-export, the respondent insisted for refund of duty paid on re-import. However, the same is rejected on the ground that it is hit by limitation under Section 26A (2) of the Customs Act, 1962. Aggrieved by said order, an appeal was filed and Commissioner (Appeals) allowed the appeal. Aggrieved by said order, present appeal is filed.
2. When the appeal came up for hearing, Ld. AR submits that the only ground of the appeal is whether provisions of Section 26A of the Customs Act is applicable in this case and whether the refund application is hit by limitation. The learned AR reiterated the grounds of appeal and drew my attention to the provisions of Section 26A of the Customs Act, 1962 read as follows:
"Section 26A. Refund of import duty in certain cases (1) Where on the importation of any goods capable of being easily identified as such imported goods, any duty has been paid on clearance of such goods for home consumption, such duty shall be refunded to the person by whom or on whose behalf it was paid, if"Page 2 of 4
Customs Appeal No. 20337 of 2022
3. The learned counsel for the respondent submits that the import made by the respondent is not an import for home consumption but it's a re-import and Section 26A of the Customs Act, 1962 is applicable only on original import of goods. The payment of duty in such cases is exempted subjected to conditions in Column No. 3 of the Notification No. 46/2017-Cus dated 30.06.2017. The respondent complied with the above Notification by paying the drawback claimed by them with interest. The learned counsel further submits that on introduction of GST on 01.07.2017, CVD levied and collected on import of goods is without any authority of law and illegal. It was paid at the relevant time due to system error and as insisted by the appellant. Same cannot be considered as payment of duty as liable to be paid by the respondent. Such collection cannot even partake the nature of tax and the limitation as per the statutory provisions is not applicable. Ld counsel for the Respondent also draw our attention to the Judgment of Hon'ble High Court of Karnataka in the matter of Arvind Lifestyle Brands Ltd., Versus Under Secretary, Technology Development Board, New Delhi [2019(368) ELT 387 (Kar.)] Where Hon'ble High court held that:
"17. In the light of the law laid down by the Hon'ble Supreme Court and the other High Courts keeping in view the peculiar facts and circumstances of the case, it is crystal clear that when the customs duty is paid in excess, the department is liable to refund the same and the limitation provided under Section 27 of the said Act of 1962 will not be applicable. Therefore, the Tribunal has erred in law and fact, solely relying on Section 27 of the said Act of 1962 while dismissing the application of the appellant-Company".
4. Ld. counsel for the respondent also relied upon the following decisions:-
1. Premraj and Ganpatraj and Company P. Ltd., v. Asst.
Collector of Customs [1977(1) ELT (J 166) (Mad.) Page 3 of 4 Customs Appeal No. 20337 of 2022
2. Asst. Collector of Customs v. Premraj and Ganpatraj and Compnay P. Ltd. [1978 (2) ELT (J 630) (Mad.) (D.B.)]
3. HMM Ltd. v. Administrator, Bangalore City [1997 (91) E.L.T. 27 (S.C)
4. Arvind Lifestyle Brands Ltd. v. Imder Secretary, Technology Development Board, New Delhi [2019 (368) E.L.T. 387(Kar.)]
5. Heard both sides, it is an admitted fact that the respondent was not supposed to pay CVD after introduction of GST w.e.f. 01.07.2007. However, it was paid at the relevant time due to system error and as insisted by the appellant. Moreover, limited ground raised by the appellants in the present Appeal is whether limitation under Section 26A is applicable in present case considering the facts and circumstances of the case.
6. From the statutory provision it is clear that provisions of Section 26A is applicable while importing goods for home consumption and the provisions governing payment of duty on re-import of goods is as per the Notification No. 46/2017 dated 30.06.2017. Once the respondent satisfied the condition of said Notification by paying drawback drawn with interest, respondent was not liable to pay duty as demanded by the appellant.
7. Considering the above, there is no merit in the present appeal and the appeal is dismissed.
(Order pronounced in open court on 25.06.2024) P.A. Augustian) Member (Judicial) ..iss Page 4 of 4