Whether refund claim is maintainable when assessment of bill of entry was not challenged?

PJ/Case law/2014-15/2195

Case:- COMMR. OF C. EX., MUMBAI VERSUS ELECTRONICS CORPORATION OF INDIA LTD.

Citation:- 2011 (274) E.L.T. 398 (TRI. - MUMBAI)

Brief facts:- Briefly stated facts of the case are that the respondent filed a bill of entry No. 701401, dated 29-8-2008 and paid appropriate duty and cleared the imported goods. After clearance they found that the goods were eligible for concessional rate of duty under Notification No. 25/98-Cus. and 69/04. Accordingly, they filed refund claim of Rs. 5,90,802/- for the customs duty paid under the aforesaid bill of entry. The lower adjudicating authority while relying upon the Apex Court’s decision in the case of Priya Blue Industries Ltd., 2004 (172)E.L.T.145 (S.C.) wherein it was held that the refund claim contrary to assessment order is not maintainable without the order of assessment having been modified in appeal or reviewed. The respondent challenged the lower authority’s order. The Commissioner (Appeals) vide his order dated 20-8-2009 opined that the respondent may apply for amendment or correction under sub-section (5) of Section 17 or Section 149 of the Customs Act, 1962 and their application for amendment or correction of the bill of entry. Aggrieved by this, the Revenue filed the present appeal.

Appellant’s contentions:- The contention of the Revenue is that the respondent has at no stage challenged the assessment order, therefore, the refund claim was rightly rejected by the lower adjudicating authority, while relying upon the Priya Blue Industries (supra). The issue before the Commissioner (Appeals) was whether the refund claim is maintainable when the assessment of bill of entry was not challenged and the same, attained finality, instead he has gone on different footing, regarding amendment or correction under Section 17(5) or 149 of Customs Act, 1962. In support of their contention, they placed reliance on the decision of the Tribunal in the case of CC (Imports), Nhava Sheva v. Indian Farmers Fertilizers Co-Op. Ltd., 2009 (237)E.L.T.570 (Tri.-Mumbai).

Respondent’s contentions:- The contention of the respondent is that there was a genuine mistake on their part and since the assessment must take into account all applicable notification in force, there should not be a bar on reassessment or amendment of the bill of entry and it can be done by the AC under Section 149 or 17. In support of their contention they have placed reliance on Tribunal’s decision in the case of Bombay Dyeing & Manufacturing Co. Ltd. v. CCE, Mumbai, 2001 (135)E.L.T.1392 (Tri.-Mum.)wherein it was held that the manufacturer may elect to avail or not to avail of the exemption notification. They have also cited the Tribunal’s decision in the case of G.S. Metalica v. CC(I), Nhava Sheva, 2007 (217)E.L.T.466 (Tri.-Mum.)wherein refund was allowed that mistakes arising out of an omission or accidental slip by customs officer can be corrected under Section 154 of Customs Act, 1962.

Reasoning of judgment:- There is no dispute that the goods were cleared from customs and after clearance they were in the custody of the company. The Commissioner (Appeals) has opined that the respondent may approach proper officer for amendment or correction in bill of entry in terms of sub-section (5) to Section 17 of Customs Act, 1962. For better appreciation, the relevant provisions are reproduced herein under :-

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, broker’s 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 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 custom house to be amended :
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”
From sub-section (5) to Section 17 of Customs Act, 1962 it is clear that the sub-section comes into play only when the assessment in sub-section (2) is contrary to the claim of the importer regarding violation of goods classification exemption or correctness of duty filed. In the instant case there was no contrary claim at the time of assessment and the appellant paid the duty leviable thereon cleared the goods and, therefore, the provisions of sub-section (5)ibid are not applicable to this case.
From the proviso to Section 149 of the Customs Act, 1962, it is clear that no amendment of Bill of Entry shall be so authorised to be amended after the imported goods have been cleared for home consumption. Undisputedly, the goods were cleared for home consumption. Therefore, the provisions of Section 149 are not applicable to this case. So far as the Tribunal’s decision cited by the respondent in the case of Bombay Dyeing & Manufacturing Co. Ltd., (supra), is concerned the Tribunal held that in case of conditional notification there is an element of option, whereas in the present case the appellants did not claim the notification and filed a refund claim subsequent to the clearance of the goods by claiming the benefit of notification. Therefore, the case law is not applicable to this case. Similarly, in the case of G.S. Metalica (supra) the issue before the Tribunal was regarding turnover value fixed under the said notification and thus not relatable to the facts of the present case. The benefit of notification can be claimed at any stage is not disputed. However, the proper course for claiming the benefit of the notification was by way of filing appeal against the assessment order as held by the Hon’ble Supreme Court in the case of Priya Blue Industries (supra), which the appellant failed to do.
In view of the above, the Commissioner (Appeals)’s order is set aside and Revenue’s appeal is allowed.

Decision:- The appeal allowed.

Comment:- The analogy of the case is that refund of excess duty paid cannot be claimed until and unless the assessment order assessing the duty has been challenged by the assessee. In the present case also, as the assessee paid duty at the rate without claiming exemption and had not challenged the order of assessment, the refund of excess duty paid could not be admissible to the assessee.

Prepared by :- Monika Tak

Comments

PJ/Case law/2014-15/2195

Post a Comment

Query