Custom, Excise & Service Tax Tribunal
Whether Press Reporters May Be Allowed ... vs Commissioner Of Central Excise, ... on 5 July, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH: KOLKATA
CUSTOMS APPEAL NO.C/174/2011
(ARISING OUT OF ORDER-IN-APPEAL NO.25/CUS/BBSR-I/2011 DATED 14.02.2011 PASSED BY COMMISSIONER (APPEALS), CENTRAL EXCISE, CUSTOMS & SERVICE TAX, BHUBANESWAR)
FOR APPROVAL AND SIGNATURE OF
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER
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 Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
M/S. VISA STEEL LIMITED
APPELLANT (S)
VERSUS
COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BHUBANESWAR-I
RESPONDENT (S)
APPEARANCE:
SHRI S.K.MOHANTY, ADVOCATE FOR THE APPELLANT(S);
SHRI B.B.AGRAWAL, A.R.(COMMR.) FOR THE REVENUE.
CORAM:
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER DR. D.M.MISRA, HONBLE JUDICIAL MEMBER Date of Hearing:10.04.2012 Date of Decision:05.07.2012 ORDER NO..
Per Shri S.K.Gaule Heard both sides.
2. The Appellant filed this Appeal against the Order-in-Appeal No. 25/CUS/BBSR-I/2011 dated 14.02.2011, whereby the Commissioner (Appeals) upheld the lower Adjudicating Authoritys Order and rejected the Appeal filed by the Appellant.
3. Briefly stated facts of the case are that the Appellant filed a Bill of Entry No.000757 dated 14.10.2008 for import of 48592 MT of Century PCI Coal(Century Semi Soft Coking Coal) of Australian origin by classifying the same under Chapter Heading 27011910 of the Customs Tariff Act, 1975 and claiming the benefit of exemption Notification No.21/2002-Cus. dated 01.03.2002 (as amended). The Customs Authorities returned the Bill of Entry to the Appellant to re-submit the same, after re-classifying the PCI Coal under Chapter Heading 27011910. The Appellant resubmitted the said Bill of Entry vide their letter dated 22.10.2008 after doing the needful on 23.10.08. Subsequently, the Bill of Entry was assessed provisionally under Customs Chapter Heading 27011910 @5% BCD, 2% Education Cess and 1% S.H.Education Cess amounting to Rs.3,48,57,562/- on 27.10.08. The Appellant paid the duty on 04.11.2008 under protest. The Bill of Entry was finally assessed on 09.03.10 after submission of necessary documents by the Appellant. Consequent upon final assessment they submitted a refund application for Rs.3,48,57,562/- vide their letter dated 02.04.10. The lower authority rejected the refund claim while relying upon the Honble Supreme Courts decision in the case of Priya Blue Industries Ltd.reported in 2004(172) ELT 145, wherein it was held that if the assessment is not challenged by filing any appeal, the refund claim made under Section 27 would not be maintainable. The Appellant challenged the same before the learned Commissioner (Appeals) who in turn upheld the lower adjudicating authoritys Order and rejected the appeal filed by the Appellant. Hence the Appeal.
4. The contention of the Appellant is that they had installed a Coke Oven Plant inside the factory premises of the Appellant firm. Coking coal is the principle raw material for manufacture of LAM Coke, which the Appellant mostly import. The contention is that the coking coal is classified under Chapter Heading 27011910 of the Customs Tariff Act, 1975, attracts Basic Customs Duty @5% ad valorem. However, vide Notification No.21/CUS-02 dated 01.03.2002, as amended, the goods are exempted from payment of Customs Duty. On 26.09.2008, the Appellant had entered into a contract with the overseas supplier, M/s. Visa Comtrade AG, Switzerland for purchase of 50,000 MT of Century PCI Coal. They filed the Bill of Entry No.00757 on 14.10.2008 claiming nil rate of Customs Duty in terms of the said Notification. The contention is that pending submission of original documents, demurrage details and the BRC, the Bill of Entry was assessed provisionally by the Customs House, Paradeep. While provisionally assessing the Bill of Entry, the Superintendent of Customs, Paradeep had suo motu changed the classification of the imported goods from 27011910 to 27011990 and also the duty liability from nil rate to the rate of 5% without extending the benefit of the said Notification. The contention is that the said action of provisional assessment is not in line with Section 18 of the Customs Act, 1962. In support of their contention, they have placed reliance on the Honble High Court of Madras in the case of Manickam Enterprises [2002(140) ELT 16(Mad.)], wherein it was held that when statute provides for provisional assessment, the same has to be done as provided under law and not according to whims and fancies of department. The contention is that the change in classification and the duty structure by the Superintendent of Customs unilaterally, was brought to the notice of the lower Adjudicating Authority; however, the same were completely ignored in the Adjudication Order. The detailed representation submitted by the Appellant was not considered by the Superintendent nor by the Assessing Authority and they paid the provisionally assessed duty under protest. Subsequently, they lodged the refund claim. The Customs Authorities returned the refund application on the ground that the Bill of Entry has not been received in the refund section after final assessment and accordingly, the Appellant was requested to re-submit the application after final assessment of the Bill of Entry. After 1 and = years from the date of payment of duty under protest by the Superintendent, vide his letter dated 10.03.2010 by way of intimation to the Appellant that the Bill of Entry has been assessed finally. The said communication has been purportedly construed by the Department as the assessment order. The lower Adjudicating Authority vide his Order dated 24.09.10 rejected the refund claim, while relying upon the Honble Supreme Courts decision in the case of Priya Blue Industries Ltd. vs. Commissioner [2004(170) A308(SC)]. The learned Commissioner (Appeals) upheld the Order of the lower Adjudicating Authority. The contention is that a conjoint reading of Sections 2(34), 3 and 4 of the Customs Act, 1962, reveals that the Superintendent of Customs is neither an officer of Customs nor the CBEC has delegated the power to any officer of Customs to appoint Superintendent for the purpose of discharging the functions especially in the matter of assessment. Therefore, the letter dated 10.03.10 of the Superintendent of Customs conveying that the Bill of Entry has been finally assessed by the Deputy Commissioner can be termed as a mere communication and not an assessment order. In support of their contention, they have placed reliance on a decision in the case of Cipla Ltd. vs. CC & CE, Pune-II [2011(273) ELT 0391(Tri-Mum.)] & Wipro Ltd. vs. CCE, Nasik [2010(262) ELT 789(Tri.-Mum.)]. The contention is that Section 128 of the Customs Act mandates that decision or order passed by an officer of Customs can be appealed against before the Commissioner (Appeals). Since the Superintendent of Customs is not empowered to perform as officer of Customs, his communication cannot be construed/termed as an appellable order. The contention of the Appellant is that the Honble Supreme Court in Priya Blue Industrys case is distinguishable on the ground that duty has been paid prior to date of final assessment; that no assessment order has been passed by the proper officer. The contention is that the Honble Supreme Court has not dealt with the second part/alternative of Section 27(1) i.e.duty borne by him. The contention is that the incidence of duty has been borne by the Appellant and not transferred/passed on to the buyer or any other person. The Appellant also placed reliance on a Delhi High Courts decision in the case of Aman Medical Products [2010(250) ELT 30], wherein the Priya Blues case (supra) has been distinguished and wherein the Honble High Court has held that refund claim of duty paid is not necessarily pursuant to an order of assessment, but can also be borne by the Appellant.
5. Learned AR(Commissioner) appearing for the Department at the outset pointed out that it is clear from pages 50 and 52 of the Appeal Book that the Bill of Entry was assessed provisionally, pursuant to at least two rounds of discussions in the Deputy Commissioners chamber. Further, from the last two sentences, it is also clear that the Bill of Entry was initially returned to the Appellant and thereafter, they have submitted that revised classification. Therefore, it is incorrect on the part of the Appellant to contend that classification was corrected/changed on the Bill of Entry by the Department. The contention is that from the letter dated 03.11.2008 at page 54 of the Appeal Book, also it is clear that not only they paid the enhanced duty (under protest) but in the letter they also reserved their right to file an appeal against the provisional assessment. The contention is that the assessment includes provisional assessment as per Section 2 of the Customs Act, 1962. Therefore, the Appellant ought to have filed an appeal against the provisional assessment, as they intended to, which is clear from the aforesaid letter dated 03.11.2008. Moreover, the learned Commissioner has confirmed by his letter dated 29.02.2012 that the Bill of Entry was finally assessed, as communicated to the Appellant on 10.03.10. If they could not file any appeal against the provisional assessment, nothing prevented them to file against the final assessment. Thus it is very much clear that the Appellant did not file any appeal against the assessment order and accordingly, the refund claim was rejected, while relying upon the Honble Supreme Courts decision in the case of Priya Blues case(supra), which held that if the assessment is not challenged, filing of appeal, the refund claim made under Section 27 would not be maintainable. The judgement of the learned Supreme Court in the case of Priya Blue (supra) is totally applicable to this case in view of the following three similarities namely the initial assessment was on the higher side, contrary to partys claim, the duty was paid under protest, and instead of an appeal being filed against assessment, a direct refund claim was filed.
He also placed reliance on the Honble Delhi High Courts decision in the case of Aman Medical [2010(250) ELT 30] wherein it is held that such a case will be governed by clause (ii) of Section 27(1) which refers to duty borne by him, and this is not the situation in the instant case and after the Revenue has challenged the Honble High Courts decision before the Honble Supreme Court, the Honble Supreme Court has admitted the appeal [2010(256) ELT A 57]. Therefore, the decision in Aman Medical (supra) is in jeopardy, does not hold the field as a binding precedent for other cases. In support of his contention, he has placed reliance on paras 38 & 39 of the case of West Coast Paper Mills Ltd.[2004(164) ELT 375 SC]. The contention is that as regards the Appellants reliance upon various decisions by the Honble Tribunal at page nos.11,13,16,20 and 24 etc. of their compilation, it is respectfully submitted that all of these were delivered on dates prior to 04.02.2009 which is the date on which the Honble Bombay High Court delivered their decision in the case of Karan Associates [2009(236)ELT 23 from which the impugned Order-in-Appeal has extensively quoted, and in which the Honble Bombay High Court has not once, but thrice emphasized that even in the absence of a speaking order under Section 17(5) of the Customs Act, the assessment on the Bill of Entry is itself appealable. Admittedly, the provisional assessment done in this case was also an assessment and therefore, it was appealable and ought to have been appealed against. They even said they would, but they did not. Not having done so, the refund is not maintainable. The contention is that as regards the CBECs Manual which was issued in the year, 2001 as a compendium of the various instructions earlier prevailing. It cannot be interpreted to preval even after delivery of the Honble Supreme Courts decision in Priya Blue in 2004 and the Honble Bombay High Courts decision in Karan Associates in 2009. In any case, Boards instructions, if contrary to law, are not binding upon the Honble Tribunals and Courts, as was held by the Honble Supreme Court in the case of Ratan Melting [2008(231) ELT 22 (SC)].
6. We have carefully considered the submissions and perused the record. It is not in dispute that the bill of entry was assessed provisionally and the Appellant have enhanced the value and paid the duty under protest with a liberty to file an appeal against the provisional assessment. As per Section 2(2) of the Customs Act, 1962, the assessment includes as under:
Section 2. Definitions.- (1) (1A).
(1B)..
(2) assessment includes provisional assessment, reassessment and any order of assessment in which the duty assessed is nil;
(3) Undisputedly, the Appellant did not file any appeal against the provisional assessment order nor against finally assessed Bill of Entry. The Honble Bombay High Court in the case of Karan Associates (supra) had categorically held that in case of non-filing of appeal against an assessed bill of entry, even in absence of a speaking order relating to assessment of the Bill of Entry, refund of excess duty is not maintainable. Their Lordships held that even if no reasoned Assessment Order has been passed, the ratio laid down by the Honble Apex Court in the case of Priya Blue Industries Ltd.(supra) would still be applicable, and accordingly, upheld the decision of the Tribunal in the said case. Their Lordships of the Honble Bombay High Court at para 11 observed as -
11.?By inserting Section 17(5) into the Customs Act, 1962 with effect from 13-7-2006 the legislature has made it mandatory for the assessing officer to pass a speaking order within the time stipulated therein. Even before the insertion of the above provisions, the assessing officer was bound to pass a speaking order wherever demanded. However, the fact that a speaking order is not passed would not entitle the importer to claim refund of duty paid as per the assessment order. Therefore, the decision of the authorities below in rejecting the refund claim of the appellant by relying upon the decision of the Apex Court in the case of Priya Blue Industries Ltd. (supra) cannot be faulted.
7. The Department has rejected the refund claim filed by the Appellant while relying upon the decision of the Honble Supreme Court in the case of Priya Blue (supra), wherein it was held that if the assessment is not challenged by way of filing any appeal, the refund claim made under Section 27 would not be maintainable. For reference of convenience, para 6 of the said decision in the case of Priya Blue (supra) is reproduced hereunder:-
6.?We are unable to accept this submission. Just such a contention has been negatived by this Court in Flock (India)s case (supra). Once an Order of Assessment is passed the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an Appeal that Order stands. So long as the Order of Assessment stands the duty would be payable as per that Order of Assessment. A refund claim is not an Appeal proceeding. The Officer considering a refund claim cannot sit in Appeal over an assessment made by a competent Officer. The Officer considering the refund claim cannot also review an assessment order.
8. The aforesaid principle laid down by the Honble Apex Court is clear and unambiguous. The basic philosophy denying refund without challenging an Assessment Order, as held by the Honble Apex Court, rests on the principle that the proceedings of refund and filing of appeal against an assessment order are two separate proceedings and the scheme under the Act meticulously provides relief to the assessee, when the assessment order is not acceptable to him. It provides that when an assessee is aggrieved by the assessment order, the recourse open to him is to file an appeal before the appellate forum instead of asking for refund directly by shortcircuiting the process of appeal prescribed to be followed under the Act, before the appropriate authority. We agree with the learned AR that the principle of law laid down in Aman Medicals case (supra) cannot be made applicable as an universal principle of law, as an SLP filed by the Revenue against the said judgement is admitted by the Honble Apex Court to decide the case. Hence, the said judgement of the Honble Delhi High Court is in jeopardy in view of the principle of law laid down by the Honble Apex Court in West Coast Paper Mills case (supra). Their Lordships at paras 38 and 39 in the case of West Coast Paper Mills (supra) observed as -
?38. In the aforementioned cases, this Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit.
?39. It has not been and could not be contended that even under ordinary civil law the judgment of the appellate court alone can be put to execution. Having regard to the doctrine of merger as also the principle that an appeal is in continuation of suit, we are of the opinion that the decision of the Constitution Bench in S.S. Rathore (supra) was to be followed in the instant case.
9. In view of the above findings, we do not see any reason to interfere with the Order passed by the learned Commissioner (Appeals). Hence, the Appeal filed by the Appellant is dismissed.
Pronounced on 05.07.2012
Sd/- Sd/-
(D.M.MISRA) (S.K.GAULE)
JUDICIAL MEMBER TECHNICAL MEMBER
DUTTA/
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CUSTOMS APPEAL NO.C/A/174/2011
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