Custom, Excise & Service Tax Tribunal
Commissioner Of Customs & Central ... vs M/S Narayan Bandekar & Sons Pvt. Ltd on 30 September, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II Appeal No. C/114/08 (Arising out of Order-in-Appeal No. GOA/Cus/MP/60 & 61/2007 dated 12.11.2007 passed by the Commissioner of Central Excise & Customs (Appeals), Goa). For approval and signature: Honble Shri B.S.V. Murthy, Member (Technical) Honble Shri Ashok Jindal, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Customs & Central Excise, Goa Appellant Vs. M/s Narayan Bandekar & Sons Pvt. Ltd. Respondent Appearance: Shri K.M. Mandal Special Counsel for Appellant Shri V.S. Nankani Advocate for Respondent CORAM: SHRI B.S.V. MURTHY, MEMBER (TECHNICAL) SHRI ASHOK JINDAL, MEMBER (JUDICIAL) Date of Hearing: 14.09.2009 Date of Decision: 30.09.2009 ORDER NO. WZB/MUM/2009 Per: Shri B.S.V. Murthy, Member (Technical) The facts are briefly stated as under: -
1. M/s Narayan Bandekar & Sons Pvt. Ltd. filed two shipping bills for export of Iron Ore from Goa Port. These shipping bills were presented to the proper officer on 28.02.2007. On the same date, the proper officer assessed the goods for cess payable @Rs.1 per kg. and assessed amount was paid by exporter on the same date. Thereafter, the Superintendent of Customs & Central Excise, who had assessed the shipping bills, also completed the examination report with the following remarks Inspected the lot. Checked the description. Quantity actually loaded will be determined on the basis of draught survey report. Thereafter, the same Superintendent also passed an order passed for shipment on the same date. Thereby permitting the clearance and loading of the Iron Ore for exportation on the same date. However, the vessel MV Iran Ashrafi, by which the goods were to be exported, arrived at the port on 1.3.2007 at about 00.42 a.m. Notice of readiness was accepted by the parties at 14.10 hrs. on 1.3.2007 and entry outward was granted on 2.3.2007. The loading was completed on 10.3.2007. In the meanwhile, export duty of Rs.300/- PMT on Iron Ore was imposed w.e.f. 1.3.2007 and on insistence by the Customs Department, the exporter paid the duty under protest on 9.3.2007. Thereafter, the exporter filed a refund claim with the department claiming refund of the export duty paid by them on the ground that the date for determination of rate of duty and tariff valuation of export goods is the date on which the proper officer makes the order permitting clearance and loading of the goods for exportation under Section 51 and in this case, the order passed for shipment was passed on 28.2.2007 itself by the proper officer. The refund claim was rejected after issue of show-cause notice by the original adjudicating authority but allowed by the Commissioner (Appeals) on an appeal filed by the exporter. Revenue is in appeal against this order of the Commissioner (Appeals) allowing the refund claim to the exporter.
2. Shri K.M. Mondal, learned Advocate on behalf of the Revenue made the following submissions.
2.1 It is settled law that without challenging the assessment order, the refund claim cannot be filed. In this case, the exporter has not challenged the re-assessment order passed by the proper officer, on the basis of which exporter paid the export duty. Therefore, in view of the decision of the Honble Supreme Court in the case of Priya Blue Industries Ltd. Vs. Commissioner of Customs (Prev) reported in 2004 (172) ELT 145 (SC) followed by the Larger Bench decision of the Tribunal in Commissioner of Customs, Nhava Sheva Vs. Eurotex Inudstries and Export Ltd. reported in 2007 (216) ELT 137 (Tri-LB), the appeal filed by the Revenue is to be allowed on this ground alone. He also submits that the fact that duty was paid under protest, would not help the exporter in view of the fact that it facilitates filing of the refund claim beyond the prescribed time limit under Section 27 of the Customs Act, 1962 and cannot be a substitute for challenging the assessment order.
2.2 He also submits that the exporter is not eligible for the refund in view of the fact that they have not shown that the burden of export duty has not been passed on to the purchasers.
3. Before we proceed further, these two preliminary grounds are to be considered and decided. The learned Advocate, on behalf of the respondent exporter, submitted that the decision of the Honble Supreme Court in Prya Blue Industries case is not applicable to the facts of the present case and in this connection he relies upon several decisions of the Tribunal, which were rendered subsequent to the decision of the Honble Supreme Court in Priya Blue Industries case. He also submits that the decision of the Tribunal in the case of Cincinnati Milacron Ltd. Vs. Commissioner of Customs(ACC), Mumbai reported in 2009 (236) ELT 619 (Tri-Mum) is directly applicable in view of the ratio of the decision in that case. Further, he also submits that provisions of Section 17 were amended and section 17(5) was introduced w.e.f. 13.7.06 and this provides that where any assessment done is contrary to the claim of the exporter, unless the exporter confirms his acceptance of the assessment in writing, the proper officer is required to pass a speaking order within 15 days from the date of assessment of the shipping bills. He submits that in this case, the very fact is that the duty was paid by the exporter under protest, would mean that a speaking order was required to be passed as per the provision of section 17(5) of the Customs Act, 1962. By not challenging the assessment order, the exporter has not lost the right of the claim for refund and, therefore, the claim for refund is valid and is required to be considered by the Revenue.
3.1 As regards unjust enrichment, he drew our attention to the contract entered into between the purchaser abroad and exporter. Article 23 of the contract provides that any duty or tax in the country of origin and country of destination to be imposed during the continuance of this contract increasing the cost of the ore to be delivered herein, the same shall be paid by the seller to the extent imposed by the country of origin and by buyer to the extent imposed by the country of destination. In view of this, he submits that there is no unjust enrichment in this case.
4. In view of the amendment of Section 17 and also in view of the fact that duty was paid under protest, we find considerable force in the argument advanced by the learned Advocate that the decision of the Honble Supreme Court in Priya Blue Industries case is not applicable to the facts of this case.
4.1 As regards unjust enrichment, we find that when show-cause notice was issued, this aspect was not one of the points, on the basis of which, the refund claim was proposed to be rejected and further, article 23 of the contract also shows that any duty or tax imposed is to be born by the seller only. Therefore, unless the Revenue is able to produce evidence to show that the exporter has collected the duty amount subsequently, the clause of unjust enrichment cannot be attracted in this case since in terms of article 23, the burden to prove that he has not passed the tax burden to the purchaser can be stated to have been discharged by the exporter.
5. The learned Advocate for the Revenue submitted the following facts in support of his contention that on facts of the case, the exporter were liable to pay export duty: -
(i) The goods entered for the export were not at Panaji anchorage for being loaded onto the vessel MV Iran Ashrafi at the time of grant of let export permission and passing of the goods for shipment on 28.2.2007 by the proper officer of customs.
(ii) The examination report given by the proper officer on 28.2.2007 of Inspected the lot was an impossibility inasmuch as the goods entered for export were declared to be at Sircaim on 28.2.2007 and were to be pre-carried by the barges for being loaded onto the vessel MV Iran Ashrafi and it is a fact that the goods so entered for export were loaded onto the said vessel between 1415 hours on 1.3.2007 and 2000 hourson 10.3.2007, and, therefore, the said examination report to that extent was superfluous and could not be said to be correct.
(iii) It was an admitted fact that the shipping bill was filed prior to arrival of the vessel MV Iran Ashrafi and they arrived at Panaji anchorage on 1.3.2007.
(iv) Section 51 of the Customs Act, 1962 provided for grant of permission by the proper officer for the purpose of Section 16(1)(a) thereof upon checking of the details contained in the shipping bill with the documents accompanying thereto, physically examining the goods, so entered for exportation and cross checking the same with the details on the invoice, shipping documents, assessing and verifying the goods to proper duty.
(v) In the facts and circumstances of the present case, the duty of customs, imposed on and after 1.3.2007 under the Second Schedule of the Customs Tariff Act, 1975, was leviable. Since the goods were also assessed to duty of customs on 9.3.2007 within the meaning of Section 51 read with Section 12, 17 and18 of the Customs Act, 1962, which was a pre-condition for grant of permission envisaged under Section 51 of the purposes of Section 16(1)(a) of the Customs Act, 1962.
(vi) In the facts and circumstances, the permission granted by the proper officer of the customs in the present case were not the permissions within the meaning and comprehension of Section 51 of the Customs Act for its being reckoned under Section 16(1)(a) thereof.
(vii) The relevant date under Section 16(1)(a) of the Customs Act, 1962 had to be co-terminus with the date of the grant of entry outwards to the vessel under Section 39 thereof in cases where shipping bills under Section 50 thereof was filed prior to the date of grant of such entry outwards, which in this case, was admittedly granted on 2.3.2007.
(viii) The export of the goods had always to be in relation to the vessel, aboard which, it was exported out of India and in the present case, the vessel MV Iran Ashrafi admittedly had arrived at the Panaji Anchorage on 1.3.2007 at 0042 hours i.e. the date on which the duty of customs @Rs.300/- PMT under Section Schedule to the Customs Tariff Act, 1975 came into force.
(ix) The duty of customs, sought to be claimed refund of and allowed by Commissioner (Appeals), was voluntarily paid by the exporter, since, the only ground for their protest was for claiming refund thereof withdrawal of the said imposition of duty by the Central Government.
5.1 He also drew our attention to the fact that the Revenue had filed an application before the Tribunal for submitting certain details gathered by the DRI and the same were allowed to be taken on record by the Tribunal. He drew our attention to the facts brought out in the DRI report. According to the DRI report, the vessel arrived at Panaji on 1.3.2007. Notice of readiness was accepted on 1.3.2007 and loading started on 1.3.2007. Therefore, it is his submission that the examination report of the proper officer on the shipping bills is totally false because there were no goods at all for inspection on that date. He submits that as per the DRI report as well as the records maintained by the Port and also the Customs Department, the first barge left from Sircaim at 13.45 hrs. on 28.2.2007 and arrived at Panjim ship side at 11.00 hrs. on 1.3.2007. The first barge which left at 13.45 hrs. on 28.2.2007 could have, at best, arrived by evening of 28.2.2007. He also drew our attention to the fact that as per the DRI report, the barge came alongside only at 11.45 a.m. on 1.3.2007. Therefore, there was absolutely no goods available for inspection by the proper officer. Therefore, the examination report is totally incorrect. Further, he also submits that the next stage of the processing of shipping bills by passing an order passed for shipment also cannot be considered to be a valid one in view of the fact that the examination report is not at all based on facts. Since there were no goods to be examined, the proper officer could not have passed any order for shipment of the goods. He drew our attention to the fact that as per Section 50, the relevant date as the date on which the proper officer makes the order permitting clearance and loading of the goods for exportation. Therefore, it is his submission that as per Section 16, the proper officer has to make order permitting clearance as well as loading of the goods for exportation and this only would be the relevant date for the purpose of determination of rate of duty and tariff valuation of the export goods. In this case, there were no goods available nor was there any ship available in the port on 28.2.2007 for loading the cargo for export. Therefore, the order passed by the proper officer cannot be taken cognizance of at all.
5.2 Further, he also submitted that according to Section 17 of the Customs Act, the proper officer is required to examine the goods before assessment. Section 17 also provides for assessment prior to the examination of the goods on the basis of declaration made in the shipping bills and the documents produced. It also provides that the goods have to be examined subsequently. It is his submission that as per law no order permitting clearance of the goods for export without examination can be made. In this view of the matter, it cannot be said that there was an assessment on 28.2.2007. The actual assessment took place only on 9.3.2007 and after that the duty was paid by the exporter. In this view of the matter, he submits that the order of the original adjudicating authority rejecting the refund claim on the ground that the relevant date is to be taken as the date of payment of duty, cannot be found fault with and is to be upheld.
6. The learned Advocate for the exporter took us through the provisions of different sections of the Customs Act to show that it was not necessary for the proper officer to inspect or examine the goods before assessment. It is also his submission that on 28.2.2007, one barge had already arrived at the port. He submits that the DRI report gives the time and date of the arrival of the barge alongside the vessel, but the actual time taken by barge for arrival to the port is only been 1.5 hours since the distance between Sircaim and Panjim port is 12 nautical miles. He relied upon a certificate issued by the Port officer. He drew our attention to the fact that the DRI report shows that the barge came alongside by the vessel on 1.3.2007 at 11.45 hrs, whereas the first barge has left Sircaim at around 13.45 hrs. and, therefore, atleast one barge is available for inspection. It is his submission that it is not necessary that all the goods have to be examined and thereafter passed for shipment order is given. He also submits that departments appeal is beyond show-cause notice, which proposed rejection of refund claim only on the ground that relevant date for the purpose of calculation of export duty was date of payment of duty, whereas the present stand taken by the Revenue now is that the assessment was made only on 9.3.2007 and, therefore, that should be taken for the purpose of calculation of export duty.
6.1 The learned Advocate also submitted that in terms of Circular No. 30/03-Cus dated 4.4.2003, in respect of bulk exports of any goods, the declaration made in the shipping bills are to be accepted without any scrutiny and there would be no physical examination of export consignment. However, it was pointed out to him that the Circular is applicable only in respect of importers and exporters who have filed the application as required under the Circular and whose application has been approved. The learned Advocate fairly admitted that exporter in this case had not made any such application and, therefore, the Circular could not be applicable. However, it is his submission that the Circular has to be seen in the spirit in which it has been issued and not by letter. The spirit of the Circular is that there is no need of examination of bulk cargo being exported and declaration can be accepted.
7. We have considered the submissions made by both the sides. Before we proceed, it would be appropriate to reproduce the relevant provisions of the Customs Act, 1962 to facilitate the discussions: -
Section 2 (16)?entry in relation to goods means an entry made in a bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post, the entry referred to in section 82 or the entry made under the regulations made under section 84;
Section 2 (17)?examination, in relation to any goods, includes measurement and weighment thereof;
Section 16.?Date for determination of rate of duty and tariff valuation of export goods. [(1) The rate of duty and tariff valuation, if any, applicable to any export goods, shall be the rate and valuation in force, -
(a)?in the case of goods entered for export under section 50, on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under section 51;
(b)?in the case of any other goods, on the date of payment of duty.] (2)?The provisions of this section shall not apply to baggage and goods exported by post.
Section 17.?Assessment of duty. (1) After an importer has entered any imported goods under section 46 or an exporter has entered any export goods under section 50 the imported goods or the export goods, as the case may be, or such part thereof as may be necessary may, without undue delay, be examined and tested by the proper officer.
(2)?After such examination and testing, the duty, if any, leviable on such goods shall, save as otherwise provided in section 85, be assessed.
(3)?For the purpose of assessing duty under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any contract, brokers note, policy of insurance, catalogue or other document whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which it is in his power to produce or furnish, and thereupon the importer, exporter or such other person shall produce such document and furnish such information.
(4)?Notwithstanding anything contained in this section, imported goods or export goods may, prior to the examination or testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under sub-section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty.
[(5) Where any assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefore under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said assessment in writing, the proper officer shall pass a speaking order within fifteen days from the date of assessment of the bill of entry or the shipping bill, as the case may be.] Section 34.?Goods not to be unloaded or loaded except under supervision of customs officer. Imported goods shall not be unloaded from, and export goods shall not be loaded on, any conveyance except under the supervision of the proper officer:
Provided that the Board may, by notification in the Official Gazette, give general permission and the proper officer may in any particular case give special permission, for any goods or class of goods to be unloaded or loaded without the supervision of the proper officer.
Section 36.?Restrictions on unloading and loading of goods on holidays, etc. No imported goods shall be unloaded from, and no export goods shall be loaded on, any conveyance on any Sunday or on any holiday observed by the Customs Department or on any other day after the working hours, except after giving the prescribed notice and on payment of the prescribed fees, if any :
Provided that no fees shall be levied for the unloading and loading of baggage accompanying a passenger or a member of the crew, and mail bags.
Section 39.? Export goods not to be loaded on vessel until entry-outwards granted. The master of a vessel shall not permit the loading of any export goods, other than baggage and mail bags, until an order has been given by the proper officer granting entry-outwards to such vessel.
Section 40.?Export goods not to be loaded unless duly passed by proper officer. The person-in-charge of a conveyance shall not permit the loading at a customs station -
(a)?of export goods, other than baggage and mail bags, unless a shipping bill or bill of export or a bill of transhipment, as the case may be, duly passed by the proper officer, has been handed over to him by the exporter;
(b)?of baggage and mail bags, unless their export has been duly permitted by the proper officer.
Section 50.?Entry of goods for exportation. (1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form.
(2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration as to the truth of its contents.
Section 51.?Clearance of goods for exportation. Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation.
8. The scheme of the Customs Act, 1962 in respect of the goods which are to be exported requires the shipping bills to be presented which would contain details of the goods to be exported and a declaration to the effect that the details contained therein are correct to the proper officer; the proper officer thereafter is required to assess the goods in terms of the provisions of Section 17 of the Customs Act, 1962; for the purpose of assessment, he may examine the goods prior to assessment or may accept the declaration given in the shipping bill and assess the goods; in such an event, the physical examination of the goods can take place at a later stage after assessment; after physical examination of the goods, and after satisfying himself that the goods entered for export are not prohibited goods and the exporter has paid the duty assessed thereon, the proper officer is required to make an order permitting clearance and loading of the goods for exportation; Section 51 requires the proper officer to permit clearance as well as loading of the goods. Section 16 of the Customs Act, 1962 is relevant to determine the date for determination of rate of duty and tariff valuation of export goods; according to Section 16 in the case of the goods entered for export under Section 50, the rate of duty and valuation will be as on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under Section 51. The scheme of the Act as described above would show that even though the officer may complete assessment even before the goods are available for examination, yet the date for determination of rate of duty and tariff valuation would be the date on which the proper officer makes an order permitting clearance and loading of the goods as per the provisions of Section 51 for exportation.
9. When we apply the scheme envisaged under the Act as discussed above to the facts of this case here, it becomes quite clear that the rate of duty in this case cannot be as on 28.2.2007. This is because we find from the records that the assessing officer had not only assessed the goods on 28.2.2007 but had also completed examination and had also made an order for clearance and loading. The facts clearly show that the first barge would not have been available for inspection before 4 p.m. or 5 p.m. assuming earliest arrival of the barge. We notice that the examination report says the proper officer had inspected the lot. Normally, the meaning of the lot is that the goods are stored on the land and not in the barge. It also gives the impression that the whole cargo was available and there was no examination of part quantity or the portion of the goods. In the absence of any such indication of part examination conducted by the proper officer, the assumption is to be that the examination report was meant to be the complete one, which was impossible in the facts and circumstances of the case. Therefore, it becomes quite clear that the order of the proper officer as regards examination is to be discarded. Once the order relating to the examination is discarded in view of the fact that the examination of the consignment could not have been done on the same date, the assessment also becomes invalid. Since there were no goods available for examination, the order passed by the proper officer cleared for shipment is also invalid and, therefore, is to be discarded.
10. Once it is held that the order passed by the proper officer in respect of examination, assessment and clearance for shipment are to be discarded, naturally, it becomes necessary to decide the relevant date under Section 16 for the purpose of determination of export duty. The show-cause notice issued by the Revenue proceeded on the same assumption that the action taken by the assessing officer was not proper and came to the conclusion that it should be the date of payment of duty for the purpose of determination of rate of duty and value.
11. The learned Advocate on behalf of the exporter took serious objection that the order of the adjudicating authority traveled beyond the show-cause notice since the show-cause notice has proposed to reject the refund claim on the ground that the relevant date for the purpose of calculation of export duty was the date of payment of duty, whereas the stand taken by the Revenue is that the assessment was made only on 9.3.2007 and, therefore, that should be taken for the purpose of calculation of export duty. We find that in this case, no doubt, such a stand was taken in the show-cause notice, we have to take note of the fact that there is no dispute as regards the fact and the dispute is only regarding the interpretation. The interpretation is on the law as to whether in the facts and circumstances of the case what should be the date for the purpose of determining the rate of duty. This is purely a legal question and it is settled law that legal question/issue can be raised at any stage of the process. Therefore, we cannot find fault with the order-in-original for taking a stand that the relevant date should be the date of payment of duty. In fact the reproduction of the relevant portion of the show-cause notice given below would help in appreciation of the fact better: -
Whereas the said Iron Ore ROM & Lumps to be shipped and exported had not entered the Panaji Port on 28.2.2007 nor had the said goods been presented for inspection on 28.2.2007 by the applicants to the Customs Officers at the Port, but same were actually presented for inspection only on 2.3.2007.
Whereas, the said Iron Ore ROM & Lumps were actually started loading from 1.3.2007 at 14.15 hrs. till 10.3.2007, and the said vessel sailed from Panaji Minor Port on 10.3.2007 for Hongkong, China.
Therefore, customs export duty leviable on the said goods exported on 10.3.2007, is Rs.300/- PMT. The applicant was accordingly required to pay the Customs export duty amounting to Rs.75,00,000/- and Rs.51,00,000/-, which was correctly paid by the applicant on 12.3.2007 vide TR-6 challan No. NIL dated 12.3.2007.
As per Section 16 of the Customs Act, 1962 date for determination of rate of duty and tariff valuation of export goods:
1. The rate of duty and tariff valuation, if any, applicable to any export goods, shall be the rate and valuation in force.
(a) In the case of goods entered for export under Section 50, on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under Section 51, whereas the goods have been loaded for exportation from 1.3.2007 to 10.3.2007.
In view of above facts the applicant is therefore required to show cause in writing to the Assistant Commissioner of Customs & Central Excise (ASU), having his office at ICE building, 6th Floor, EDC Complex, Patto, Panaji, Goa as to why the said refund claim amounting to Rs.75,00,000/- and Rs.51,00,000/- should not be rejected. In fact the show-cause notice leaves the issue of determination the relevant date for determination of rate of duty open to be determined at the time of adjudication and the adjudicating authority came to the conclusion that date of payment would be relevant.
12. As discussed earlier in this case, the whole issue has arisen because the order passed by the proper officer on 28.2.2007, which is not valid. According to Section 16, either we have to determine the date on which the proper officer made an order permitting clearance and loading of the export goods or adapt Section 16(b) and consider the date of payment as the relevant date. It would be not very appropriate to hold that the date of payment of duty would be relevant. That is applicable only when it is not known as to when the goods were exported and the same cannot be determined. In this case, from the facts, it is quite clear that the loading started on 1.3.2007 and the ship arrived at the port on 1.3.2007. The very fact that the loading commenced on 1.3.2007 and in view of the fact that loading starts only after the shipping bill is assessed and permission is given by the customs officer to commence loading. The only option and correct option available would be to determine the rate of duty as on the date on which the loading of the goods started specifically in view of the fact that in this case, arrival of the ship as well as loading started on 1.3.2007 and that too with the approval of the customs. Once it is held that 1.3.2007 is the relevant date for determining the rate of duty, the exporter becomes ineligible for the refund of export duty paid.
13. Another point that has been missed by almost everyone in this case is the fact that at the time of writing the physical examination report, the proper officer had clearly written that quantity actually loaded will be determined on the basis of draught survey report. Therefore, in this case even though it was not specifically stated, the fact remains that the assessment was provisional and was subject to actual quantity loaded on the ship. In fact in the case of the shipping bill No. 281/06-07 dated 28.2.2007, the actual quantity shipped was only 24,445 MTs. Consequently, the cess payable would come down to Rs.24,445/- and the export duty would come down to Rs.73,33,500/-. Section 17(4) provides that if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. Unfortunately, in this case, the proper officer has failed to re-assess the goods on the basis of actual quantity loaded even though in his physical examination report (which has been discarded now) he had indicated that actual quantity will be determined after the survey. Nevertheless, even if we determine that the loading started on 1.3.2007 and treating it as the relevant date, the facts remain that re-assessment in terms of provision of Section 17(4) of the Customs Act, 1962 would be required. Therefore, in this case, the goods should have been re-assessed and the assessment order passed.
14. Further, the exporter had paid duty under protest and a claim was made before us by the learned Advocate for the exporter that the assessing officer was required to pass a speaking order since payment of duty under protest by them indicated that they had not accepted the assessment. However, a letter dated 9.3.2007 written by the exporter to the Revenue says that the protest was made to reserve their right to claim the above amount back in case the Government decided to roll back the export duty, even though in the third paragraph of the letter, the exporter stated that the payment is being made without prejudice to their rights and contentions in the matter. Their last sentence clearly says that the protest was only to reserve the right to claim the amount in case the export duty was rolled back. It is not a case of the exporter that the export duty has been rolled back. However, in view of the fact that the quantity of the goods loaded in the ship was less than the quantity indicated in the shipping bill, the re-assessment as required under Section 17 was necessary and the same has not been done till date. In the absence of a proper assessment order, the refund claim was premature and in fact the exporter should have and could have sought the assessment order either as per the provision of Section 17(4) or as per the provision of Section 17(5), both of which we find applicable in the present case since the protest can be interpreted to mean that it was only in respect of roll back or it covers other aspects.
15. The issue before us involved a set of facts and circumstances, which are not comparable to facts and circumstances cited before us in any other case and, therefore, we are not discussing all the case cited before us after considering the same and finding them not relevant. Further, we also like to make it clear that the conclusion drawn here that the relevant date for determination of rate of duty have been reached in view of the peculiar facts and circumstances of the case.
16. In view of the above discussion, we direct that the appropriate authority shall re-assess the goods under Section 17 of the Customs Act, 1962 treating the relevant date for determination of export duty as 1.3.2007. Needless to say the refund claim filed by the exporter would also be reconsidered after assessment and decision taken by the appropriate authority. For this purpose, the impugned order-in-appeal is set aside and the matter remanded to original adjudicating authority for a fresh decision after giving opportunity to the exporter, to present their case.
(Pronounced in Court on 30.09.2009)
(Ashok Jindal) (B.S.V. Murthy)
Member (Judicial) Member (Technical)
Vks/
1