Whether the appellants are eligible for refund of the duty claimed to have been paid in excess on the basis of DMT of the goods? Whether the said claim of refund is sustainable without challenging the assessment of the shipping bills?

PJ/Case Law/2018-2019/3479

Case: RAWMIN MINING AND INDUSTRIES PVT. LIMITED Versus C.C. (PREV.), JAMNAGAR
Citation:2018 (12) G.S.T.L. 74 (Tri. - Ahmd.)
Issue: Whether the appellants are eligible for refund of the duty claimed to have been paid in excess on the basis of DMT of the goods? Whether the said claim of refund is sustainable without challenging the assessment of the shipping bills?
Brief facts: Refund claims on the ground that the subject goods namely, Bauxite was exported under the impugned shipping bills, wherein the duty was paid on the basis of Wet Metric Tons (WMT for short). The appellant’s contention is that it should have been paid on the basis of Dry Metric Tons (DMT) in accordance with the Sales-Purchase Contract with the buyers of the goods. The appellants had issued final invoices and the quantity was revised on the basis of DMT, and the value was worked out accordingly. He submits that export duty should, therefore, be on the basis of this DMT quantity and on the value thereof. Hence, there is excess payment and they are entitled for refund of the same.
Appellant’s contention:The Learned Counsel for the appellants submits that the common issue involved in these appeals is refund claims on the ground that the subject goods namely, Bauxite was exported under the impugned shipping bills, wherein the duty was paid on the basis of WMT whereas the appellant’s contention is that it should have been paid on the basis of DMT in accordance with the Sales-Purchase Contract with the buyers of the goods. The appellants had issued final invoices and the quantity was revised on the basis of DMT, and the value was worked out accordingly. He submits that export duty should, therefore, be on the basis of this DMT quantity and on the value thereof. Hence, there is excess payment and they are entitled for refund of the same. In addition to the above issue, the impugned orders also deal with the refund due to shortage of goods, and the refund of Education Cess and S.H. Education Cess, which were not leviable. Learned Counsel also submits that the Adjudicating Authority sanctioned refunds on these counts which was not disturbed by the Orders-in-Appeal. The other contentions of the Learned Counsel are that the findings of the Commissioner (Appeals) in the Order-in-Appeal that the assessment of the shipping bills were not challenged and therefore they are not eligible for refund is raised by the Commissioner (Appeals) for the first time, and the concerned decision of the Hon’ble Supreme Court has been distinguished by the Hon’ble Delhi High Court in the case of Aman Medical Products Limited v. Commissioner of Customs, Delhi - 2010 (250) E.L.T. 30(Del.) wherein the Hon’ble High Court held that where there is no lis between Revenue and party concerned, the refund application would be maintainable. He also relied upon the decision of the Tribunal in the case of Commissioner of Customs, Guntur v. Sameera Trading Company - 2011 (264) E.L.T. 578(Tri. - Bang.). The Learned Counsel also submitted that the contract specifically mentions the quantity in DMT and therefore the transaction value is determined on the same and hence, their final invoice reflects the transaction value correctly. Therefore, it submits that the duty is to be paid on the said value. Relying upon the decision of the Tribunal in the case of Dream Logistics Co. (India) Pvt. Limited v. Commissioner of Customs, Mangalore - 2015 (318) E.L.T. 512(Tri. - Bang.). Learned Counsel further submits that the lower authorities themselves had reopened assessment and have sanctioned the refund for the short quantity, and on the issue of Cess.
Respondent’s contention:On the other hand, Learned Authorised Representative submits that the appellants had filed the shipping bills under the Self-Assessment Procedure. He draws the attention of the Bench to the scheme of Self Assessment and submits that Self-Assessment is supported by Sections 17, 18 and 50 of the Customs Act, 1962 and the Bill of Entry (Electronic Declaration) Regulations, 2011 and Shipping Bill (Electronic Declaration) Regulations, 2011 and has been brought into effect from 8-4-2011. He submits that the appellants had filed the shipping bills themselves and assessed the same on their own. In the shipping bills the quantity is mentioned as such and there is no qualification to the same such as WMT or DMT. The invoices accompanying the shipping bill also shows the quantity without any mention of DMT or WMT. The FOB value is shown in both the invoices and shipping bills, on the basis of said weight declared in the said documents. He further submits that there is no dispute that the shipping bills were assessed finally, and there is no claim that the same has been assessed provisionally nor the duty has been paid under protest. He also draws attention of the Bench to the duty paying challans wherein there is no mention that it has been paid under protest or is covered under provisional assessment. He submits that if the assessee were claiming that assessment should be on the basis of DMT, they should have declared the same in the shipping bills and other documents and should have claimed provisional assessment or brought the same to the notice of the Customs officers/department. The Learned Authorised Representative argues that they have failed to do so and assessments were finalised. As per the decisions of the Hon’ble Supreme Court, if the assessment is finalised, refund claim cannot be entertained without challenging the assessment order. He relies upon the decisions of the Hon’ble Apex Court in Collector of Central Excise v. Flock (India) Pvt. Limited - [(2000) 6 SCC 650 = 2000 (120) E.L.T. 285(S.C.)], Priya Blue Industries Limited v. Commissioner of Customs (Preventive) - [2004 (172) E.L.T. 145(S.C.)], and the recent decision in the case of Commissioner of Customs, Bangalore v. BPL Telecom Limited - [2015 (325) E.L.T. 467(S.C.)], wherein the Apex Court reiterated the decisions in Flock (India) Pvt. Limited and Priya Blue Industries Limited. The Learned AR submits that the refund which was sanctioned by the lower authorities was on the shortage noticed at the time of clearance of the goods, as is evident from the noting on the reverse of the shipping bills wherein the actual quantity exported has been mentioned by the Customs Preventive Officer. Therefore, they were eligible for refund on this count without any re-assessment of the shipping bill. As regards the refund of the amount paid as Cess, the Learned Authorised Representative submits that the assessee paid the Cess on his own volition whereas there was no levy of Cess on the goods, and therefore the collection of the same by the department was without authority of law and hence the lower authorities immediately returned the same to the appellants. He contends that there is no reassessment of the shipping bills on this count also.
Judgement:On consideration of the arguments of both sides and going through the relevant records, the decision making authority found that the crux of the issue involved in all the four appeals revolve around “Whether the appellants are eligible for refund of the duty claimed to have been paid in excess on the basis of DMT of the goods, though in the concerned shipping bills it is not mentioned whether the quantity exported is in DMT or WMT?”. The related question is whether the said claim of refund is sustainable without challenging the assessment of the shipping bills. On careful consideration of the facts of the case, authority found that the appellants had cleared the goods by filing shipping bills pertaining to the period from March, 2013 to January, 2014. They were covered under the Self-Assessment Scheme and had filed the shipping bills, assessed it and paid the duty mentioned in the shipping bills, on their own. They also did not claim provisional assessment, nor had they specifically brought it to the notice of the Customs Officers that as per the contract terms the goods are to be valued on DMT quantity basis. Under the said circumstances, authority found force in the arguments of the Learned Authorised Representative that the shipping bill was assessed finally on the basis of information declared by the appellants themselves. Moreover, the assessments had become final, appellant’s claim for refund on the basis of quantity of goods as per DMT is not sustainable in view of the various decisions of the Hon’ble Supreme Court (supra).
We find that the Hon’ble Apex Court has taken a consistent view on the said issue as is reflected in the decisions of the Court in the case of Flock (India) Limited (supra), Priya Blue Industries Limited (supra) and in the recent case of BPL Telecom Limited (supra). The Hon’ble Supreme Court held in the said case as;
“Though initially dispute arose about classification of the goods in question, viz., equipments pertaining to setting up of VSAT terminals used in television broadcasting, that was decided and on that basis, the respondent herein filed application for refund. This refund application was rejected by the Deputy Commissioner of Customs vide his orders dated 31-7-2000.
The decisions of the Hon’ble Delhi High Court that are relied upon by the appellants are based on different facts and in that case there was a mistake in paying customs duty without taking benefit of the Notification No. 6/2002. In the instant case, there is no such mistake in the shipping bills finally assessed based on the Self-Assessment made by the appellants. The appellant contended that the transaction value is based on DMT and as per contract with the buyer of the goods. This plea of the appellant and the interim order of stay by the Tribunal in the relied upon case of Dream Logistics Co. (India) Pvt. Limited (supra) is of no avail as the shipping bill and invoices do not indicate anything about DMT or WMT, and the appellants themselves declared the quantity and value and assessed the shipping bill accordingly. The decision making authority also observe that in the case of Dream Logistics Co. (India) Pvt. Limited, the assessment was provisional, and the said issue was raised at the time of final assessment. In the instant case, the assessment was final and it was not challenged. Authority found force in the contentions of the Learned Authorised Representative that they had not raised this issue either in the documents such as shipping bill, invoices etc., nor had they brought it to the notice of the Customs Officers or claimed provisional assessment or paid duty under protest.
In view of the above, decision making authority do not find any reason to interfere with the impugned orders. The appeals are dismissed.
Decision: Appeal dismissed
Comment: Thekernel of the case is that the appellantshere is not considered to be eligible of refund of the duty claimed to have been paid in excess on the basis of DMT of the goods. Since the contention of the appellants that the transaction value is based on DMT as per the contract with the buyer of the goods is not held good as the shipping bill and invoices do not indicate anything about DMT or WMT, and the appellants themselves declared the quantity and value and assessed the shipping bill accordingly. It was also held that appellant has not raised this issue either in the documents such as shipping bill, invoices etc., nor had they brought it to the notice of the Customs Officers or claimed provisional assessment or paid duty under protest.
Prepared By: Arundhati Bajpai

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PJ/Case Law/2018-2019/3479

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