Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (Adj) -New ... vs Vivo Mobile India Pvt Ltd on 13 September, 2021
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
CUSTOMS APPEAL No. 52388 of 2019
(Arising out of Order-in-Appeal No. CC(A)Cus/D-I/ACC-Export/Refund/
NCH/250-251/2019-20 dated 14.06.2019 passed by Commissioner of Customs
(Appeals), New Delhi)
Principal Commissioner of Customs ...Appellant
New Delhi (Import)
ACC Import Commissionerate
New Custom House,
New Delhi-110037
Versus
M/s. Vivo Mobile India Pvt Ltd. ....Respondent
3rd Floor, Delta Tower, Plot No. 54,
Sector-44, Gurugram, Haryana.
AND
CUSTOMS APPEAL No. 52389 of 2019
(Arising out of Order-in-Appeal No. CC(A)Cus/D-I/ACC-Export/Refund/
NCH/250-251/2019-20 dated 14.06.2019 passed by Commissioner of Customs
(Appeals), New Delhi)
Principal Commissioner of Customs ...Appellant
New Delhi (Import)
ACC Import Commissionerate
New Custom House,
New Delhi-110037
Versus
M/s. Vivo Mobile India Pvt Ltd. ....Respondent
rd
3 Floor, Delta Tower, Plot No. 54,
Sector-44, Gurugram, Haryana.
APPEARANCE:
Mr. Sunil Kumar, Authorised Representative of the Department
Mr. Kishore Kunal & Mr. Pratush Chaudhary, Advocates for the
Respondent
CORAM: HON'BLE MR.JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. C.J. MATHEW, MEMBER (TECHNICAL)
Date of Hearing: 26.08.2021
Date of Decision: 13.09.2021
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FINAL ORDER NO. 51808-51809/2021
JUSTICE DILIP GUPTA:
The Department has filed these two Appeals to assail the
common order dated 14 June 2019 passed by the Commissioner
of Customs (Appeals)1, by which the two appeals filed by M/s.
Vivo Mobile India Pvt. Ltd.2 have been allowed and the two
orders, both dated 23 January 2017, passed by the Deputy
Commissioner (Refund)3 have been set aside. The Commissioner
(Appeals) has further allowed the two Applications filed by Vivo
Mobile under section 27 of the Customs Act 19624 for refund of
Additional Customs Duty5 and has directed that Vivo Mobile would
be entitled to a refund of Rs.3,01,49,633/- and Rs.2,92,96,394/-.
It needs to be noted that though the Deputy Commissioner had
by said order dated 23 January, 2017 sanctioned the aforesaid
refund amount but a direction was given that this amount should
be credited to the Consumer Welfare Fund in terms of section
27(2) of the Customs Act.
2. To appreciate the reasons as to why the applications were
filed by Vivo Mobile to claim refund, it would be necessary to state
the relevant facts.
3. Vivo Mobile, which is a respondent in both the appeals, was
during the relevant period engaged in import and distribution of
mobile phones and its accessories in India. The relevant period in
1. The Commissioner(Appeals)
2. Vivo Mobile
3. Deputy Commissioner
4. Customs Act
5. Additional Duty
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the first appeal is from December 15, 2014 to March 24, 2015 and
from May 30, 2015 to June 6, 2015 in the second appeal. It paid
the Additional Duty of Customs at the rate of 6% up to February
2015 and thereafter, at the rate of 12.5% under section 3(1) of
the Customs Tariff Act 19756 on the 12 bills of entry. However, in
terms of a notification dated 17 March 2012, the Additional Duty
was leviable at 1% under the entry at serial 263A for importing
mobile phones, provided condition no. 16 was satisfied.
Condition no. 16 provides that for an assessee to claim lesser 1%
Additional Duty, it should not have taken credit under rule 3 or
rule 13 of the CENVAT Credit Rules 20047 in respect of the inputs
or capital goods used in the manufacturer of these goods.
4. The Supreme Court, in the context of import of Nylon
Filament Yarn of 210 deniers, examined a similar condition no. 20
in SRF Ltd. V/s Commissioner of Customs, Chennai8. The
Appellant had claimed nil rate of Additional Duty by relying upon a
notification dated 1 March 2002. The Deputy Commissioner of
Customs held that SRF Ltd. would not be entitled to exemption
from payment of Additional Duty since it did not fulfill condition
no. 20 of the said notification, which is to the effect that the
importer should not have availed credit under rule 3 or rule 11 of
the CENVAT Rules in respect of the capital goods used for the
manufacture of these goods. The admitted position was that such
CENVAT Credit was not availed by SRF Ltd. The Tribunal held that
when the credit under CENVAT Rules was not admissible, the
6. Tariff Act
7. CENVAT Rules
8. 2015(318) ELT 607(SC)
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question of fulfilling the aforesaid condition did not arise and,
therefore, as condition no. 20 was not satisfied SRF Ltd could not
claim nil rate of Additional Duty. This reasoning of the Tribunal
was found to be not correct by the Supreme Court in view of the
judgments of the Supreme Court, wherein it was held that for the
purpose of attracting Additional Duty under section 3 of the
Customs Tariff Act on the import of a manufactured or produced
article, the actual manufacture or production of a like article in
India was not necessary and that for quantification of Additional
Duty in such a case, it has to be imagined that the article
imported was manufactured or produced in India and then to see
what amount of excise duty was leviable thereon. SRF Ltd was,
therefore, held entitled to exemption from payment of Additional
Duty.
5. Vivo Mobile, on the same reasoning, claimed that it would
have to pay the reduced Additional Duty at the rate of 1% in
terms of condition no. 16 of the notification dated 17 March 2012,
which is identical to condition no. 20 of the notification dated 1
March 2002 that was examined by the Supreme Court in SRF Ltd.
It had, however, paid Additional Duty at the rate of 6% up to
February 2015 and at the rate of 12.5% thereafter. It therefore,
filed applications for refund of the excess Additional Duty that was
paid by it.
6. On scrutiny of the documents submitted by Vivo Mobile with
the refund claims, it was found by the Department that various
documents, including re-assessment of bills of entry in
respect of the aforesaid refund amount had not been filed.
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Accordingly, a deficiency memorandum dated 28 January 2016
was issued to clarify the position. Vivo Mobile responded to the
deficiency memo and pointed out that the refund applications filed
by it be considered as a request for re-assessment of the bills of
entry since "the filing of the refund application ipso facto means
and implies that they are seeking re-assessment of all the
impugned bills of entry". It was further stated that when the
goods were allowed to be cleared, the valuation aspect was
examined by the proper officer and the officer competent to
decide the refund application had a concurrent jurisdiction. Thus,
it was pleaded that the refund claim itself should be treated as a
request for re-assessment of the bills of entry, in view of the
decision of the Supreme Court in Karnataka Power Ltd vs
Commissioner of Customs (Appeals)9.
7. The Deputy Commissioner framed two questions to be
decided and they are as follows:
"(i) Whether the importer was eligible for the benefit of
notification dated 17 March 2012 in terms of condition no.
16 in the light of judgement passed by the Supreme Court
in SRF; and
(ii) Whether the importer was eligible for refund claim, if the
answer to the aforesaid question is in the affirmative."
8. The Deputy Commissioner, in view of the decision of the
Supreme Court in SRF Ltd, held that Vivo Mobile in terms of
condition no. 16 of the notification dated 17 March 2012, would
be required to pay Additional Duty at the reduced rate of 1%.
The Deputy Commissioner then examined whether it was
necessary for Vivo Mobile to get re-assessment of the bills of
9. 2002 (142) ELT 482 (SC)
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entry and for this purpose examined the decision of the Delhi High
Court in M/s. Micromax Informatics Ltd. vs. Union of India10
that had been placed by Vivo Mobile to contend that it was not
necessary to seek re-assessment of the bills of entry. The Delhi
High Court had held that an authority would not be justified in
refusing to entertain an application for refund only because no
appeal was filed against the assessment order, even if there was
one. The Deputy Commissioner, accordingly, held that there was
no necessity of seeking modification in the bills of entry. The
relevant portion of the order is reproduced below:
"In any event, after 8th April, 2011, as noticed hereinbefore,
as long as customs duty or interest has been paid or borne by
a person, a claim for refund made by such person under
section 27(1) of the Act as it now stands, will have to be
entertained and an order passed thereon by the authority
concerned even where an order of assessment may not have
reviewed or modified in appeal. Hence, again, following
judicial discipline, the refund claim of the claimants,
needs to been entertained on the basis of their self-
assessed Bills of Entry, though there is no modifying
order for those Bills of Entry"
(emphasis supplied)
9. After having so held, the Deputy Commissioner examined
whether the refund claim was barred by limitation and whether
the incidence of Additional Duty had not been passed on to the
buyer, in which event it would be a case of unjust enrichment.
The Deputy Commissioner found that though the refund
Application had been filed in time, but the claimant had failed to
prove that the claim was not hit by unjust enrichment.
Accordingly, even though the refund claim was sanctioned, the
Deputy Commissioner directed that the amount should be credited
10. 2016 (335) ELT 446 (Del.)
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in the account of the Consumer Welfare Fund in terms of section
27(2) of the Customs Act.
10. Feeling aggrieved, Vivo Mobile filed two appeals before the
Commissioner (Appeals) against that part of the orders of the
Deputy Commissioner that held that since it was a case of unjust
enrichment, the sanctioned amount would not be payable to Vivo
Mobile and would be required to be deposited in the Consumer
Welfare Fund. The appeals filed by Vivo Mobile were allowed by
the Commissioner (Appeals) for the reason that the incidence of
Additional Duty had not been passed on to the buyers. The
Commissioner (Appeals), therefore, directed that the amount be
refunded to Vivo Mobile. The observations are as follows:
"5.4 The period for which the impugned refund claim
was filed pertains to the period of 15.12.2014 to
05.06.2015. I find that in respect of a similar case of
M/s YU Televentures Pvt. ltd., wherein refund claim was
filed for the period January, 2015 to February, 2015,
while disposing of Writ Petition No. W.P. (c) 6750/2016,
the Hon'ble Court of Delhi vide Order dated 03.08.2016
set aside the OIO dated 07.06.2016 passed by the
Adjudicating authority, wherein the refund claim was
rejected by the Adjudicating authority on the similar
grounds. The relevant portion of the said Hon'ble High
Court Order is re-produced below:
"16. With the Petitioner having already placed all
the relevant documents on record and with the
only reason for rejection of the refund application
being the untenable ground of alleged failure by
the Petitioner to submit reassessed B/Es, the
Court sees no reason why the Respondents
should be permitted to deny the Petitioner the
grant of refund any longer.
17. Accordingly, the refund claim filed by the
Petitioner on 28th December 2015 is allowed. The
Respondents will now pay to the Petitioner the
amount of refund as claimed together with
interest due thereon up to the date of refund not
later than two weeks from today."
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5.5. I also find from the records, submitted by the
Appellant that in respect of the Appellant's own similar
cases, refund claims of Rs. 8,05,06,281/- covering the
period 15.06.2015 to 14.07.2015 have been sanctioned
to the Appellant by the same Adjudicating Authority vide
Order-in-Original No. 381/AT/2018 dated 28.05.2018,
holding that the appellant was entitled to get the refund
and the said amount was refunded to the Appellant.
5.6. Similarly, I find that the Respondent
Commissionerate itself has sanctioned various refund
claims to another importers of similar goods, post SRF
Ltd. judgement, viz. Order-in-Original No.
2828/VKJ/2016 dated 23.01.2017 etc.
*******
In view of the above discussions and findings, practices
adopted in different Customs Houses while sanctioning
refund to the importer on identical matter and strongly
relying upon the ratio of the judgements passed by
Hon'ble High Court of Delhi, Madras and Bombay, supra,
I find that the impugned orders of the Adjudicating
authority to credit the refund amounts of Rs.
3,01,49,636/- and Rs. 2,92,96,394/- to the Consumer
Welfare Fund in terms of Section 27(2) read with
Section 28D of the Customs Act, 1962 is not legally
sustainable and accordingly set aside."
11. It is against the orders of the Commissioner (Appeals) that
the present appeals were filed by the Department on 30
September 2019 in view of the directions issued by the
Committee of Commissioners under section 129A(2) of the
Customs Act. The Committee of Commissioners had observed that
the Commissioner (Appeals) was not justified in placing reliance
upon the decision of the Delhi High Court in M/s. YU
Televentures Pvt. Ltd. vs. Union of India11 since in that case
the issue involved was whether refund could be granted without
re-assessment of the bills of entry, whereas in the present
case the issue involved was whether there was unjust
enrichment and the issue relating to re-assessment of bills
of entry was not involved. The Committee of Commissioners
11. 2016 (340) ELT 88 (Del.)
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also observed that the Commissioner (Appeals) had not dealt with
the reasons given by the Deputy Commissioner relating to unjust
enrichment. The grounds taken in the Appeals that were filed on
30 September 2019 are reproduction of the grounds indicated by
the Committee of Commissioners for filing the appeal and they
are reproduced below:
"B. It is also observed that the case of M/s YU
Televentures Pvt. Ltd. [2016(340) ELT 88(Del.)] relied
upon by the Commissioner (Appeals) to apply it to the
present case is erroneous one as much as in the case of
M/s YU Televentures Pvt. Ltd. the issue involved was
whether refund can be granted without re-assessment of
the B/Es. The relevant para no- 15 to 17 are
reproduced below:
"15. The impugned order dated 07th June 2016 passed
by the respondent No-04 rejecting the petitioner's
refund claim is accordingly set aside.
16. With the petitioner having already placed all the
relevant documents on record and with the only reason
for rejection of the refund application being the
untenable ground of alleged failure by the petitioner to
submit re-assessed B/Es. the Court sees no reason why
the respondents should be permitted to deny the
petitioner the grant of refund any longer.
17. Accordingly, the refund claim filed by the
petitioner on 28th December, 2015 is allowed. The
respondents will now pay to the petitioner the amount of
refund as claimed together with interest due thereon up
to the date of refund not letter than two weeks from
today"
Whereas, in the present case the issue involved is
whether or not the refund claimant has passed the test
of unjust enrichment and not grant of refund without re-
assessment of the B/Es. Thus it appears that the
Commissioner (Appeals) has incorrectly applied the
order of the Hon'ble High Court of Delhi.
C. Further, going on the merits of the case the first
appellate authority has also not touched upon the
reason given by the Adjudicating authority to decide that
why the claim is hit by unjust enrichment."
12. It transpires that against various orders passed by the High
Courts and the Tribunal at Kolkata, Civil Appeals came to be
decided by the Supreme Court on 18 September 2019. The
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leading matter is ITC Ltd. vs. Commissioner of Customs
Kolkata-IV12. The issue involved in all the Civil Appeals was
whether, in the absence of any challenge to the order of
assessment in appeal, any refund application against the assessed
duty can be entertained. The Bench of the Tribunal at Kolkata
had opined that unless the order of assessment is appealed, no
refund application against the assessed duty can be entertained.
On the other hand, the Delhi High Court had opined that when
there is no assessment order for being challenged in appeal,
because there is no contest or lis and hence no adversarial
adjudication, a refund application can be maintained even if
appeals are not filed against the assessed bills of entry. The
Madras High Court had also similarly opined. The first question
that arose for consideration before the Supreme Court was
whether a self-assessment, when there is no speaking order, can
be termed to be an order of self-assessment. It was urged on
behalf of the assesses that there is no application of mind in such
a situation and merely an endorsement is made by the authorities
concerned on the bills of entry which endorsement cannot be said
to be an order, much less a speaking order. This contention of the
assesses was not accepted by the Supreme Court and it was held
that the endorsement made on the bills of entry would be an
order of assessment and that when there is no lis, a speaking
order is not required to be passed in "across the counter affair".
The Supreme Court then examined the provisions of sections 17
and 27 of the Customs Act, both prior to the amendments made
12. 2019-TIOL-418-SC-CUS
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by Finance Act 2011 and after the amendments, and observed
that there is no difference even after the amendments as self-
assessment is also an assessment. The observations of the
Supreme Court are as follows:
"38. No doubt about it that the expression which was
earlier used in Section 27(1)(i) that "in pursuance of an
order of assessment" has been deleted from the
amended provision of Section 27 due to introduction of
provision as to self-assessment. However, as self-
assessment is nonetheless an order of assessment, no
difference is made by deletion of aforesaid expression as
no separate reasoned assessment order is required to be
passed in the case of self-assessment as observed by
this Court in Escorts Ltd. v. Union of India & Ors13."
13. It needs to be noted that in Escort Ltd., the issue that had
arisen for consideration before the Supreme Court was regarding
the bills of entry classifying the imported goods under a particular
tariff item and payment of duty thereon. The Supreme Court held
that in such a case signing the bills of entry itself amounted to
passing an order of assessment and, therefore, an application
seeking refund on the ground that the imported goods fell under a
different tariff item attracting lower rate of duty, should be filed
within six months after the payment of duty. The Supreme Court,
therefore, held that the signature made in the bills of entry was
an order of assessment of the assessing officer.
14. The Supreme Court, thereafter, in ITC observed that the
provisions relating to refund were more or less in the nature of
execution proceedings and it would not be open to an authority,
while processing a refund application, to make a fresh assessment
13. 2002-TIOL-2706-SC
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on merits. The relevant portions of the judgment of the Supreme
Court are reproduced below:
"44. The provisions under section 27 cannot be
invoked in the absence of amendment or
modification having been made in the bill of entry
on the basis of which self-assessment has been
made. In other words, the order of self-
assessment is required to be followed unless
modified before the claim for refund is entertained
under Section 27. The refund proceedings are in the
nature of execution for refunding amount. It is not
assessment or re-assessment proceedings at all. Apart
from that, there are other conditions which are to be
satisfied for claiming exemption, as provided in the
exemption notification. Existence of those exigencies is
also to be proved which cannot be adjudicated within
the scope of provisions as to refund. While processing a
refund application, re-assessment is not permitted nor
conditions of exemption can be adjudicated. Re-
assessment is permitted only under Section 17(3)(4)
and (5) of the amended provisions. Similar was the
position prior to the amendment. It will virtually
amount to an order of assessment or re-assessment in
case the Assistant Commissioner or Deputy
Commissioner of Customs while dealing with refund
application is permitted to adjudicate upon the entire
issue which cannot be done in the ken of the refund
provisions under Section 27.
-------------
47. When we consider the overall effect of the
provisions prior to amendment and post amendment
under Finance Act, 2011, we are of the opinion that
the claim for refund cannot be entertained unless
the order of assessment or self assessment is
modified in accordance with law by taking
recourse to the appropriate proceedings and it
would not be within the ken of section 27 to set
aside the order of self assessment and reassess
the duty for making refund; and in case any person is
aggrieved by any order which would include self
assessment, he has to get the order modified under
section 128 or under other relevant provisions of the
Act.
48. Resultantly, we find that the order(s) passed by the
Customs, Excise and Service Tax Appellate Tribunal is to
be upheld and that passed by the High Courts of Delhi
and Madras to the contrary, deserves to be and are
hereby set aside. We order accordingly. We hold that
the application for refund were not maintainable. The
appeals are accordingly disposed of. Parties to bear
their own coasts as incurred."
(emphasis supplied)
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15. The Department, in view of the aforesaid judgment of the
Supreme Court in ITC, filed applications on 8 November 2019 for
raising an additional ground that the claim for refund cannot be
entertained unless the Assessment Order or Self-Assessment is
modified in accordance with law. The leave sought by the
Appellants to add the additional ground in the memo of the two
appeals was granted by the Tribunal by order dated June 08,
2020. However, it was clarified that this would not mean that the
issue raised in the additional ground has been decided in favour of
the Appellant.
16. Shri Sunil Kumar, learned Authorised Representative
appearing for the Department, submitted that the refund
applications filed by Vivo Mobile were not maintainable for the
reason that the assessment orders or self-assessment orders had
not been modified and in support of this contention he placed
reliance upon the decision of the Supreme Court in ITC. Learned
Authorised Representative also submitted that in any event, Vivo
Mobile was not entitled to the refund amount because of the
principles of unjust enrichment and the said amount was required
to be deposited in the Consumer Welfare Fund.
17. Shri Kishore Kunal, learned counsel appearing for Vivo
Mobile defended the order passed by the Commissioner (Appeals)
but at the same time also submitted that in view of the settled
position of law, both prior to and post ITC, amendments or
corrections can be carried out in the bills of entry in view of the
provisions of sections 149 and 154 of the Customs Act at the
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stage of refund also. In support of this submission, learned
counsel placed reliance upon paragraphs 44 and 47 of the decision
of the Supreme Court in ITC as also the judgments of the Bombay
High Court in Dimension Data India Private Ltd. vs.
Commissioner of Customs and ANR.14 and of the Telangana
High Court in M/s. Sony India Pvt. Ltd. vs. Union of India and
Another15, which judgments have considered the decision of the
Supreme Court in ITC.
18. The submissions advanced by the learned Authorised
Representative appearing for the Department and the Learned
Counsel appearing for the respondent Vivo Mobile have been
considered.
19. As the learned Counsel for the respondent has made an
alternative submission that Vivo Mobile can seek
amendment/correction of the Bills of Entry under sections 149 and
154 of the Customs Act, it is not necessary to examine the
submissions made by the learned Authorised Representative for
setting aside the order passed by the Commissioner (Appeals).
20. In order to appreciate the alternative submissions made by
the learned counsel for the respondent, it would be appropriate to
first reproduce sections 149 and 154 of the Customs Act and they
are as follows:
"149. Amendment of documents
Save as otherwise provided in sections 30 and 41,
the proper officer may, in his discretion, authorise any
document, after it has been presented in the customs
14. 2021 (1) TMI 1042- Bombay High Court
15. 2021 TIOL-1707-HC-Telangana- CUS
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house to be amended in such form and manner, within
such time, subject to such restrictions and conditions, as
may be prescribed:
PROVIDED that no amendment of a bill of entry or a
shipping bill or bill of export shall be so authorised to be
amended after the imported goods have been cleared for
home consumption or deposited in a warehouse, or the
export goods have been exported, except on the basis of
documentary evidence which was in existence at the time
the goods were cleared, deposited or exported, as the case
may be.
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."
21. Section 27 of the Customs Act deals with claim for refund of
duty and the portion of this section relevant for the purposes of
these appeals is reproduced below:
"27. Claim for refund of duty
(1) Any person claiming refund of any duty or interest,-
a) paid by him; or
b) borne by him,
may make an application in such form and manner as may be
prescribed for such refund to the Assistant Commissioner of
Customs or Deputy Commissioner of Customs, before the expiry
of one year, from the date of payment of such duty or interest."
22. In paragraph 44 of the judgment of the Supreme Court in
ITC, which has been reproduced in paragraph 14 of this order, the
Supreme Court observed that the provisions of section 27 cannot
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be invoked in the absence of amendment or modification having
been made in the Bills of Entry on the basis of which self-
assessment was made. The Supreme Court further observed that
refund proceedings are in the nature of execution proceedings
and, therefore, the order of self-assessment is required to be
followed unless modified/amended before the claim for refund is
entertained under section 27. In this connection, the Supreme
Court relied upon the decision of the Supreme Court in Priya Blue
Industries Ltd. vs. Commissioner of Customs
(Preventive)16.
23. The Supreme Court ultimately observed in paragraph 47 of
the judgment that the overall effect of the provisions of section 27
of the Customs Act, both prior to the amendment and post
amendment, is that the claim for refund cannot be entertained
unless the order of assessment or self-assessment is modified "in
accordance with law by taking recourse to appropriate
proceedings". The Modification of the order is under the
provisions of section 128(3) of the Customs Act.
24. It is for this reason that the learned counsel for the
respondent submitted that even if the refund applications that
were filed cannot be entertained, then too it is open to the
respondent to invoke the provisions of sections 149 or 154 of the
Customs Act for either seeking amendment in the Bill of Entries or
seeking correction in the Bills of Entry and then refund
applications can be filed.
16. 2004 (172) E.L.T. 145 (S.C.)
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25. The Bombay High Court in Dimension Data India
examined this precise issue and after referring to the provisions of
sections 149 and 154 of the Customs Act, observed as follows:
"18. From a careful analysis of section 149, we find
that under the said provision a discretion is vested on
the proper officer to authorise amendment of any
document after being presented in the customs house.
However, as per the proviso, no such amendment shall be
authorised after the imported goods have been cleared for
home consumption or warehoused, etc. except on the basis of
documentary evidence which was in existence at the time the
goods were cleared, deposited or exported, etc. Thus,
amendment of the Bill of Entry is clearly permissible even in a
situation where the goods are cleared for home consumption.
The only condition is that in such a case, the amendment
shall be allowed only on the basis of the documentary
evidence which was in existence at the time of clearance of
the goods.
19. This bring us to section 154 of the Customs Act
which deals with correction, clerical errors, etc. It says
that clerical or arithmetical mistakes in any decision or order
passed by the Central Government, the Board or any officer
of customs under the Customs 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.
20. Thus, section 154 permits correction of any
clerical or arithmetical mistakes in any decision or
order or of errors arising therein due to any incidental
slip or omission. Such correction may be made at any
time.
21. From a conjoint reading of the aforesaid
provisions of the Customs Act, it is evident that
customs authorities have the power and jurisdiction to
make corrections of any clerical or arithmetical
mistakes or errors arising in any decision or order due
to any accidental slip or omission at any time which
would include an order of self-assessment post out of
charge.
22. Having noticed and analysed the relevant legal
provisions, we may now turn to the decision of the Supreme
Court in ITC Ltd. Vs. Commissioner of Central Excise,Kolkata
IV (supra). The question which arose before the Supreme
Court was whether in the absence of any challenge to the
order of assessment in appeal, any refund application against
the assessed duty could be entertained.
22.1. From the question itself, it is clear that the issue
before the Supreme Court was not invocation of the
power of re-assessment under section 17(4) or
amendment of documents under section 149 or
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correction of clerical mistakes or errors in the order of
self-assessment made under section 17(4) by
exercising power under section 154 vis-à-vis
challenging an order of assessment in appeal. The issue
considered by the Supreme Court was whether in the absence
of any challenge to an order of assessment in appeal, any
refund application against the assessed duty could be
entertained. In that context Supreme Court observed in
paragraph 43 as extracted above that an order of self-
assessment is nonetheless an assessment order which is
appealable by "any person" aggrieved thereby. It was held
that the expression "any person" is an expression of wider
amplitude. Not only the revenue but also an assessee could
prefer an appeal under section 128. Having so held, Supreme
Court opined in response to the question framed that the
claim for refund cannot be entertained unless order of
assessment or self-assessment is modified in accordance with
law by taking recourse to appropriate proceedings. It was in
that context that Supreme Court held that in case any person
is aggrieved by any order which would include an order of
self-assessment, he has to get the order modified
under section 128 or under other relevant provisions of
the Customs Act (emphasis ours).
22.2. Therefore, in the judgment itself Supreme Court
has clarified that in case any person is aggrieved by an
order which would include an order of self-assessment,
he has to get the order modified under section 128 or
under other relevant provisions of the Customs
Act before he makes a claim for refund. This is because
as long as the order is not modified the order remains
on record holding the field and on that basis no refund
can be claimed but the moot point is Supreme Court
has not confined modification of the order through the
mechanism of section 128 only. Supreme Court has
clarified that such modification can be done under other
relevant provisions of the Customs Act also which would
include section 149 and section 154 of the Customs Act."
(emphasis supplied)
26. The Telangana High Court in Sony India also examined
almost a similar controversy as has been raised in these two
appeals. The appellant therein had imported mobile phones in
India for trading purposes during the period 04.08.2014 to
29.01.2015. At the time of import of the mobile phones, the
petitioner had not claimed any exemption under serial no. 263A
(ii) of the Exemption Notification which allowed payment of
Additional Duty at the rate of 1% only in the Bills of Entry in view
of the decision of the Supreme Court in SRF Limited. The
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petitioner, in view of the decision in Supreme Court in ITC, made
an application for amendment of the Bills of Entries under section
149 of the Customs Act so that after that the duty could be
refunded. The application filed by the petitioner was however,
rejected. The contentions of the petitioners, as noted in paragraph
14 of the judgment of the Telangana High Court, are reproduced
below:
14. The petitioner contends that the impugned order has
been passed in complete contradiction with the decision
of the Supreme Court in ITC Ltd. (supra) wherein it has
been held that a BoE is required to be amended or
modified, under the relevant provisions of the Customs
Act, before filing of a refund application under Section
27 of the Customs Act; that under the Customs Act, a
BoE can be either modified by way of filing an appeal
under Section 128 of the Customs Act or can be
amended under Section 149 and / or 154 of
the Customs Act; that under the Customs Act, there is
no other manner in which a BoE can be modified or
amended part from these two methods; thus, from the
above observations of the Supreme Court, it is
very clear that a refund of any excess duty paid
while filing the BoE, can be claimed under Section
27 of the Customs Act when such a BoE is
amended; that the 2nd respondent has not even
considered the decision of the Supreme Court in ITC Ltd.
(supra); that the Supreme Court clearly stated in the
above case that a BoE has to be amended before filing a
claim of refund under Section 27; and that the ratio of
decision is very clearly applicable, and it is squarely
covered in the present case.
19. Petitioner also contended that the 2nd respondent
erred in holding that the BoEs should have been
challenged only by way of filing an appeal before the
Appellate authority and on not being challenged, the
assessment became final.
20. Petitioner pointed out that a BoE can be
amended either by filing an appeal u/s.128 or
being amended under Sec.149 of the Act; and he
could not have insisted that only an appeal is a
proper remedy to amend the BoEs ignoring Sec.
149 of the Act.
(emphasis supplied)
27. The contention of the Department, as noted in paragraphs
23, 24 and 26, are reproduced below:
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"23. It is contended that meanwhile the Supreme Court in
ITC Ltd. (2 supra) held that refund under Section
27 would only be permissible when the Bill of Entry had
been amended or modified under the provisions of
the Customs Act, 1962; that in ITC Ltd. (2 supra), it was
held that the refund under the provisions of Section 27 of
the Customs Act, 1962 would only be available when Bill
of Entry has been amended or modified under the
provisions of Custom Act, 1962; that in the instant case,
the petitioners filed self-assessed Bills of Entry and not
disputed the assessment, and the assessment had
attained finality; that it is not the case of any error or
lapse apparent on account of 2nd respondent's -
Department; that petitioner was required to seek re-
assessment as provided under the provisions of Section
128 of the Customs At, 1962 within such stipulated time
and as per the conditions provided therein.
24. According to the 2nd respondent, the petitioner's
request for amending the BoE is against the provisions of
the Customs Act and was not sustainable.
26. It further stated that same action cannot be sought
under two different sections of the Customs Act, 1962;
that there is a specific provision for re-assessment as
provided under Section 128 of the Customs Act, 1962;
that if re-assessment has to be carried out under Section
149 without any limitation of time, the existence of the
provisions of Section 128 and Appeal mechanism therein
would become redundant; and if at all the amendments,
even in the nature of re-assessment, are to be carried out
under the provisions of Section 149, there is no
requirement for the existence of the provisions of Section
128 or other similar provisions."
28. The Telangana High Court noted that though there is a
remedy of an appeal against the assessment of the Bills of Entry,
but section 149 of the Customs Act also enabled an assessee to
seek amendments in the Bills of Entries. The relevant portions of
the judgment are reproduced below:
"33. So Sec.149 is an additional remedy available to the
petitioner to seek amendment of the BoEs subject to
the condition that such amendment is sought on the basis of
documentary evidence which was in existence at the time the
goods were cleared, deposited or exported as the case may
be.
34. In the decision of the Supreme Court in ITC Ltd. (supra)
while holding that the refund cannot be granted by way of a
refund application under Section 27 of the Act until and
unless an assessment order is modified and a fresh order of
assessment is passed and duty re-determined, the Supreme
Court nowhere said that such amendment or
modification of an assessment order can only be done
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in an Appeal under Section 128. In para 47, the Court held
categorically.
35. Thus, even the Supreme Court clearly indicated that
the modification of the assessment order can be either
under Section 128 or under other relevant provisions of
the Act i.e. Section 149.
36. Therefore, the stand of the respondents in the counter
affidavit that only reassessment under Section 128 is the
remedy available to the petitioner, and Section 149 cannot be
invoked, is not tenable. We also reject the plea of the 2nd
respondent that there is no possibility of getting modified an
order of assessment under any other relevant provision and
that petitioner is trying to overcome limitations stipulated
in Section 128.
37. The only condition required to be fulfilled for seeking
amendment of documents such as a BoE under Section 149 is
that such amendment should be sought on the basis of
documentary evidence which was in existence at the time the
goods were cleared, deposited or exported, as the case may
be.
xxxxxxxx
46. Moreover, the said order was passed on 28.06.2019 prior
to the decision in ITC Ltd. (supra) on 18.09.2019. The
Supreme Court has clarified in para no.47 of ITC Ltd.
(supra) that an order of assessment can be modified
either under Section 128 or under other relevant
provisions of the Act, and thus clarified that
modification of an order of assessment can also be
sought under Section 149 of the Act, its judgment has
to be followed by the 2nd respondent, as it is binding
under Article 141 of the Constitution of India.
xxxxxxxxx
48. Further, it is the duty and responsibility of the Assessing
Officer / Assistant Commissioner to correctly determine the
duty leviable in accordance with law before clearing the goods
for Home consumption. The assessing officer instead, having
failed in correctly determining the duty payable, has caused
serious prejudice to the importer / petitioner at the first
instance. Thereafter, in refusing to amend the Bill of Entry
under Section 149 of the Act, to enable the importer /
petitioner to claim refund of the excess duty paid, the
Assessing Authority / Assistant Commissioner caused further
great injustice to petitioner.
49. Also, the Assessing Authority has failed to consider
the fact that Section 149 of the Act does not prescribe
any time limit for amending the Bill of Entry filed and
assessed. The power to amend under Section 149 of
the Act is a discretionary power vested with the
authority. Since, it is due to incorrect determination of duty
by the assessing authority initially, the petitioner is compelled
to seek amendment of Bill of Entry under Section 149 of the
Act. Thus, the importer / petitioner cannot be penalized for
what the authority ought to have done correctly by himself."
(emphasis supplied)
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29. Thus, in view of the aforesaid decisions of the Bombay High
Court in Dimension Data India and the Telangana High Court
in Sony India, the respondent can take recourse to appropriate
proceedings, including the provisions of sections 149 and 154 of
the Customs Act for either amendment of the Bills of Entry or for
correction of the Bills of Entry. These two decisions have
considered the decision of the Supreme Court in ITC.
30. It is expected that if such applications are now filed by Vivo
Mobile, the same would be adjudicated expeditiously as the refund
applications were filed in 2015. It is, therefore, ordered that in the
event applications are now filed by Vivo Mobile, they shall be
decided expeditiously and preferably within a period of three
months from the date of filing of the applications. The refund
applications, if any filed after the decision is taken on such
applications, shall also be decided expeditiously.
31. Customs Appeal No. 52388 of 2019 and Customs Appeal No.
52389 of 2019 are, accordingly, disposed of with the said
observations.
(Pronounced in open Court on 13.09.2021)
(JUSTICE DILIP GUPTA)
PRESIDENT
(C.J. MATHEW)
MEMBER (TECHNICAL)
REKHA/JB
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C/52388-52389/2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
CUSTOMS APPEAL No. 52388 of 2019
(Arising out of Order-in-Appeal No. CC(A)Cus/D-I/ACC-Export/Refund/
NCH/250-251/2019-20 dated 14.06.2019 passed by Commissioner of Customs
(Appeals), New Delhi)
Principal Commissioner of Customs ...Appellant
New Delhi (Import)
ACC Import Commissionerate
New Custom House,
New Delhi-110037
Versus
M/s. Vivo Mobile India Pvt Ltd. ....Respondent
3rd Floor, Delta Tower, Plot No. 54,
Sector-44, Gurugram, Haryana.
AND
CUSTOMS APPEAL No. 52389 of 2019
(Arising out of Order-in-Appeal No. CC(A)Cus/D-I/ACC-Export/Refund/
NCH/250-251/2019-20 dated 14.06.2019 passed by Commissioner of Customs
(Appeals), New Delhi)
Principal Commissioner of Customs ...Appellant
New Delhi (Import)
ACC Import Commissionerate
New Custom House,
New Delhi-110037
Versus
M/s. Vivo Mobile India Pvt Ltd. ....Respondent
rd
3 Floor, Delta Tower, Plot No. 54,
Sector-44, Gurugram, Haryana.
APPEARANCE:
Mr. Sunil Kumar, Authorised Representative of the Department
Mr. Kishore Kunal & Mr. Pratush Chaudhary, Advocates for the
Respondent
CORAM: HON'BLE MR.JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. C.J. MATHEW, MEMBER (TECHNICAL)
Date of Hearing: 26.08.2021
Date of Decision: 13.09.2021
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C/52388-52389/2019
ORDER
As the appeals have been decided, the Stay Applications have been rendered infructuous.
(JUSTICE DILIP GUPTA) PRESIDENT (C.J. MATHEW) MEMBER (TECHNICAL) JB 25 C/52388-52389/2019 CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH - COURT NO. 1 CUSTOMS APPEAL No. 52388 of 2019 Principal Commissioner of Customs ...Appellant New Delhi (Import) Versus M/s. Vivo Mobile India Pvt Ltd. ....Respondent AND CUSTOMS APPEAL No. 52389 of 2019 Principal Commissioner of Customs ...Appellant New Delhi (Import) Versus M/s. Vivo Mobile India Pvt Ltd. ....Respondent APPEARANCE:
Mr. Sunil Kumar, Authorised Representative of the Department Mr. Kishore Kunal & Mr. Pratush Chaudhary, Advocates for the Respondent CORAM: HON'BLE MR.JUSTICE DILIP GUPTA, PRESIDENT Date of Hearing: 26.08.2021 Date of Decision: 13.09.2021 ORDER Order Pronounced.
(JUSTICE DILIP GUPTA) PRESIDENT JB