Custom, Excise & Service Tax Tribunal
Archean Marbles & Tiles Pvt. Ltd vs Cc, Hyderabad on 23 October, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench Single Member Bench
Court I
Appeal No: C/30626/2017
(Arising out of Order in Appeal No. HYD-CUS-000-APP-044-16-17, Dated 20.06.2016 passed by Commissioner (Appeals), CCCE, Hyderabad)
Archean Marbles & Tiles Pvt. Ltd Appellant (s)
Vs.
CC, Hyderabad Respondent(s)
Appearance Sri Y. Srinivasa Reddy, Advocate for the Appellant. Shri B. Guna Ranjan, Superintendent/AR for the Respondent.
Coram:
Honble Mr. M.V. Ravindran, Member(Judicial) Date of Hearing : 23.10.2017 Date of decision: 23.10.2017 FINAL ORDER No. A/31728/2017 [Order per: Mr. M.V. Ravindran]
1. This appeal is directed against Order-in-Appeal No: HYD-CUS-000-APP-044-16-17, dated 20.06.2016.
2. Very briefly, the facts of the case are that appellant sought clearances of imported consignment of polished marbles under six bills of entry and discharged duty as indicated on EDI system; noticing they are eligible for benefit of exemption under notification No. 12/2015 and paid excess duty, they filed a letter dated 06.07.2015 for grant of excess amount paid as refund which was summarily disposed of by the Asst. Commissioner of Customs stating that the bills of entry has been finally assessed, hence the same cannot be considered. On an appeal, the first appellate authority has recorded that assessent of the imports which were made during the period July October 2014, has attained finality and as the appellant has not challenged the same as per the provisions of Customs Act, 1962, the dismissal/rejection of the refund claim of the appellant seems to be in order.
3. Ld. Counsel submits that the issue is now settled by Honble High Court of Delhi in the case of Micromax Informatics Ltd vs. Union of India [2016(335)E.L.T 446(Del.)] and submits that post 08.04.2011 amends to Section 27 of the Act has been gone into by Honble High Court of Delhi and they have recorded that there is no assessment order and if the person has borne the duty; as per Section 27, is entitled to refund claim without any challenge perse to the assessment, if any.
4. Ld. DR, on the other hand, submits that the lower authorities were correct in coming to such a conclusion as the provisions of Customs Act, 1962 require an assesment to be challenged by way of appeal before the first appellate authority. It is his submission that even in the case of bills of entries, the appellant has to follow the procedure as laid down by Supreme Court of India in the case of Escorts Limited [1998(97)ELT 211(S.C)] stating that this kind of assessment is across the counter and an order of assessment needs to be challenged and the same view has to be taken in the case in hand. He would submit that the ratio of judgments of the Apex Court in the case of Priya Blue Industries Limited and Flock (India) Pvt. Ltd. would be applicable directly in the case in hand and the judgment of Honble High Court of Delhi in the case of Micromax Informatics Ltd. has been effectively distinguished by the Tribunal in the case of Ceat Limited [2016(335)E.L.T 693(Tri.-Mumbai)] and hence the ratio may not be applicable.
5. On careful consideration of the submissions made, I find that the issue is in a narrow compass as to whether the appellant was right in seeking refund of the amount paid in excess by them as bills of entry under EDI system.
6. Undoubtedly, appellant had filed bills of entry on EDI and did not claim the benefit of refund, subsequently claims by way of refund to the lower authorities. I find that both the lower authorities have not considered the law as settled by Honble High Court of Delhi in the case of Micromax Informatics Ltd; Honble High Court in that case has dealt with similar issue which is present in the case in hand. I would with respect reproduce the relevant paras:
5. In the impugned order while rejecting the refund claim, the Assistant Commissioner (Refund) observed that the claimant has filed the refund of duty on the bills of entry, which are already assessed. According to the Assistant Commissioner, once the assessment order was passed, duty was payable in terms thereof and unless such assessment order was reviewed under Section 28 of the Act or modified in an appeal. Relying on the decisions of the Supreme Court in Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) - 2004 (172) E.L.T. 145 (S.C.) and Collector of Central Excise v. Flock (India) (P.) Ltd. - 2000 (120) E.L.T. 285 (S.C.) it was held that a refund claim contrary to the assessment order was not maintainable unless the assessment order was reviewed or modified in appeal.
6.?This Court has heard the submissions of Mr. Tarun Gulati, learned counsel for the petitioner and Mr. Satish Kumar, learned counsel for the Customs.
7.?It requires to be noticed that the decision in Priya Blue Industries Ltd. v. Commissioner of Customs (Prevention) (supra) was rendered by the Supreme Court in respect of Section 27 of the Act as it stood prior to 8th April, 2011. Factually the said decision does not apply to the facts of the present case since the said decision notes at the outset that the petitioners have imported a ship for breaking purposes. They filed a Bill of Entry. The amount of duty payable was assessed. It is clear, therefore, in the facts of that case that there was an assessment order passed on the B/Es filed by the importer. In Collector of Central Excise v. Flock (India) (P.) Ltd. (supra) again an assessment order had been passed.
8.?In Aman Medical Products Limited v. Commissioner of Customs, Delhi (supra), a Division Bench of this Court was considering an instance of an importer having filed B/Es, paid customs duty and thereafter claimed refund under Section 27 of the Act. The question of law framed by the Court in the appeal filed by the assessee against an order of refusal of refund read as under :
Whether non-filing of appeal against the assessed Bill of Entry in which there was no lis between the importer and the Revenue at the time of payment of duty will deprive the importer of his right to file refund claim under Section 27 of the Customs Act, 1962?
9.?The above question was answered in the negative. Analysing Section 27 of the Act, as it then stood, the Court noticed that it was always not necessary to have an order of assessment for a person to claim refund of duty. The initial payment of duty in terms of Section 27(1)(i) of the Act could be pursuant to an order of assessment or in terms of Section 27(1)(ii) of the Act could be borne by him. The Court explained :
The object of Section 27(i)(ii) is to cover those classes of case where the duty is paid by a person without an order of assessment, i.e. in a case like the present where the assessee pays the duty in ignorance of a notification which allows him payment of concessional rate of duty merely after filing a Bill of Entry. In fact, such a case is the present case in which there is no assessment order for being challenged in the appeal which is passed under Section 27(1)(i) of the Act because there is no contest or lis and hence no adversarial assessment order.
10.?The Court in Aman Medical Products Limited (supra) also took note of and held that the decisions in Collector of Central Excise v. Flock (India) (P.) Ltd. (supra) and Priya Blue Industries Ltd. v. Commissioner of Customs (Prevention) (supra) would not apply since those were cases where there is no assessment order on dispute/contest, like as is in the present case. It was held in Aman Medical Products Limited (supra) that the assessee was entitled to maintain the refund claim notwithstanding that there was no appeal filed against the assessed B/Es.
11.?It is significant that with effect from 8th April, 2011, the structure of Section 27 of the Act has undergone a change. The relevant portions of Section 27, as amended with effect from that date, read as under :
27.?Claim for refund of duty. - (1)?Any person claiming refund of any duty or interest, -
(i) paid by him; or
(ii) borne by him, may make an application in such form and manner as may be prescribed for such refund of 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 :
Provided that where an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under sub-section (1), as it stood before the date on which the Finance Bill, 2011 receives the assent of the President and the same shall be dealt with in accordance with the provisions of sub-section (2) :
Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest :
Provided also that where the amount of refund claimed is less than rupees one hundred, the same shall not be refunded.
Explanation. - For the purposes of this sub-section, the date of payment of duty or interest in relation to a person, other than the importer, shall be construed as the date of purchase of goods by such person.
(1A) ....
(1B)....
(2)?If, on receipt of any such application, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied that the whole or any part of the duty and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund :
Provided that the amount of duty and interest, if any, paid on such duty as determined by the Assistant Commissioner of Customs or Deputy Commissioner of Customs under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to -
(a) the duty and interest, if any, paid on such duty, paid by the importer or the exporter, as the case may be, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(b) the duty and interest, if any, paid on such duty, on imports made by an individual for his personal use;
(c) the duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty, to any other person;
(d) the export duty as specified in section 26;
(e) drawback of duty payable under sections 74 and 75;
(f) the duty and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify :
Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty and interest, if any, paid on such duty has not been passed on by the persons concerned to any other person.
12.?An important change that has been made is that a person can now claim refund of any duty or interest as long as such duty or interest was paid or borne by such person. The conditionality of such payment having been made pursuant to an order of assessment does not exist. Secondly, once an application is made under Section 27(1) of the Act, it is incumbent on the authority concerned to make an order under Section 27(2) determining if any duty or interest as claimed is refundable to the applicant. The proviso to Section 27(2) of the Act sets out the instances where refund should be paid to the claimant instead of being credited to the Consumer Welfare Fund. The only relevance as far as payment of duty under protest is concerned is indicated in the second proviso to sub-section (1) of Section 27 of the Act which states that the limitation of one year shall not apply in such event. In other words, whether or not the duty is paid under protest once an application for refund is made in the requisite manner and form as prescribed, it is incumbent on the authority to deal with such an application. Where there is an assessment order, the authority will take it into account in deciding the application for refund. If such assessment order has been reviewed or modified in appeal such further order will obviously be taken into account. In other words, under Section 27 of the Act, as it now stands, it is not open to an authority to refuse to consider the application for refund only because no appeal has been filed against the assessment order, if there is one.
13.?As far as the present case is concerned, there was indeed no assessment order as such passed by the customs authorities. Although under Section 2(ii) of the Act, the word assessment includes a self-assessment, the clearance of the goods upon filing of the B/E and payment of duty is not per se an assessment order in the context of Section 27(1)(i) as it stood prior to 8th April, 2011, particularly if such duty has not been paid under protest. 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.
7. The law decided by Honble High Court of Delhi is applicable in the case in hand.
8. Ld. DR tried to distinguish the said decision of the High Court stating that the Tribunal in the case of CEAT Limited had distinguished the judgment which was relied upon by the Lordships. I find in the case in hand, bills of entry filed were after April 2011 and the said law has been considered by Honble High Court of Delhi in the case of Micromax Informatics Ltd. Even the CBEC circular presented by DR (No. 17/2011-Customs, dated 08.04.2011) may not carry Revenues case any further as the said circular explains the factual position as to assessment prior to 4/2011 and the law on this has already been settled by Honble High Court of Delhi in the case of Micromax Informatics Ltd.
9. In view of the foregoing, I set aside the impugned order and allow the appeal.
(Dictated and pronounced in the open Court ) (M.V. RAVINDRAN) MEMBER(JUDICIAL) VRG Appeal No: C/30626/2017 (6) Appeal No: C/30626/2017 (1)