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Appearance:

Shri S.J. Vyas, Advocate for the Appellant Ms. Nitina Nagori, Deputy Commissioner (AR) for the Respondent CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Date of Hearing : 28.09.2018 Date of Decision : 01.11.2018 Final Order No. A/12480 / 2018 Per : Ramesh Nair The brief facts of the case are that M/s. Hatimi Steels, Bhavnagar purchased a ship MV Fisher-D from an overseas seller M/s. Star Matrix Limited, Hong Kong. As agreed upon by both vide MOA dated 09.07.2014 and paid Customs duty. Due to dispute between the Master of vessel and M/s. Hatimi Steels beaching could not take place. As a result, M/s. Hatimi Steels filed a Special Civil Suit No. 3/2014 in the Ld. Special Judge at Alang. M/s. Hatimi Steels vide Addendum No. 01 dated 15.09.2014 cancelled the MOA dated 30.05.2014 and withdrew all their rights. Vide addendum No. Appeal No. C/10274/2018-SM 2/2014 to MOA dated 30.05.2014 both, M/s. Hatimi Steels and the overseas seller mutually cancelled their MOA dated 30.05.2014. M/s. Sai Shipping Services produced MOA dated 25.09.2014 and informed the department that their principal had advised to re-sale the vessel to M/s. Prakash Re- rollers Pvt. Limited and requested for amendment in IGM. The Deputy Commissioner, Bhavnagar at the request of M/s. Sai Shipping Services substituted the name of the importer and passed the order-in-original No.38/SBY/2014-15 dated 30.09.2014. The Adjudicating Authority had held that price of ship in the international market stands duly reflected in the earlier MOA dated 30.05.2014 between the overseas and M/s. Hatimi Steels; that the said price declared by M/s. Hatimi Steels would be adopted for the purpose of valuation which shall remain valid even after reduction in price; that the agreement was made between the overseas seller and buyer after entry of the vessel in the Indian territory; that any sale after the act of import can be described as a sale in the course of domestic trade and not a sale in the course of international trade. The appellant filed bill of entry and paid the customs duty accordingly. The appellant filed refund claim on 16.02.2015 on the ground that (i) they had paid duty, (ii) M/s. Hatimi Steels had not taken physical delivery of the vessel and was assessed in terms of Section 14 of the Customs Act, 1962, i.e. transaction value and correct price for assessment was as contracted by them with the overseas seller. The Adjudicating Authority had wrongly treated M/s. Hatimi Steels as original importer and to discharge all the liability as prescribed under Section 46 of Appeal No. C/10274/2018-SM the said Act the value, rate of duty and rate of exchange prevailing at the time of presenting the bill of entry is taken by the Assessing Officer as per the order-in-original dated 30.09.2014 on account of amendment of IGM, was not correct. The refund claim was returned by the Deputy Commissioner vide letter dated 19.03.2015 stating that the appellant has not challenged the order-in-original dated 30.09.2014. Therefore, the same attained finality and in the light of this, the refund claim does not appear to be maintainable and liable to be returned to the appellant. Being aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals) on the ground that decision was taken by the Deputy Commissioner in gross violation of principles of natural justice. Ld. Commissioner (Appeals) remanded the matter to the lower authority with direction for considering all the facts and the documents and to consider the request of the appellant for issuance of show cause notice and grant personal hearing and to pass a suitable order/speaking order in adherence to principles of natural justice, vide order-in-appeal dated 21.10.2014.

Appeal No. C/10274/2018-SM

2. Shri S.J. Vyas, ld. Counsel appearing on behalf of the appellant submits that order passed on amendment of IGM does not come in the way of granting the refund of the appellant for the reason that appellant have paid customs duty while filing the bill of entry. Since the appellant have paid the duty on their own, the refund is maintainable under Section 27. He submits that the order of IGM amendment was passed under Section 30(3) of the Customs Act whereas the filing of bill of entry and payment of duty is under a different provision of law therefore, the order under Section 30(3) of Customs Act will not have any effect on the independent claim of refund.

3. Ms. Nitina Nagori, ld. Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.

4. I have carefully considered the submissions made by both the sides and perused the record. I find that Deputy Commissioner of Customs, at the time of amendment of IGM had clearly raised objection on the valuation and for which a suitable and speaking order was passed whereby the value of original import was maintained. Therefore, subsequently when the bill of entry was filed, the value was declared in accordance with the order of IGM amendment. In my view, once there was lis between department and the assessee and by passing a speaking order, the Deputy Commissioner held that value for the purpose of customs duty shall be the Appeal No. C/10274/2018-SM value adopted originally. The impugned order came to be passed thereafter. Unless and until the order on IGM amendment is challenged/reversed, the appellant without taking such recourse, suo-motu cannot decide the value differently. Therefore, in the facts and circumstances of the present case, it was legal obligation on the appellant to challenge the order of IGM amendment, if at all they were not satisfied on the issue of valuation. Therefore, without challenging that order, straightway claiming the refund is clearly pre-mature.

Therefore, I am completely in agreement with both the lower authorities that without challenging the order passed on IGM amendment, the appellant's refund is pre-mature and not sanctionable. Accordingly, the impugned order is upheld and the appeal is dismissed.

(Order pronounced in the open court on 01.11.2018) Ramesh Nair Member (Judicial) KL