2021 (9) TMI 646 - AT - Customs

Refund of Additional Customs Duty - benefit of notification dated 17 March 2012 - rate of Additional Duty was reduced - incidence of Additional Duty passed on or not - principles of unjust enrichment - entitlement to amendment of the Bills of Entry or for correction of the Bills of Entry - sections 149 and 154 of the Customs Act - HELD THAT - The Telangana High Court in M/S. SONY INDIA PVT. LTD. VERSUS UNION OF INDIA AND ANOTHER 2021 (8) TMI 622 - TELANGANA HIGH COURT examined almost a similar controversy as has been raised in these two appeals. The appellant therein had imported mobile phones in India for trading purposes during the period 04.08.2014 to 29.01.2015. At the time of import of the mobile phones the petitioner had not claimed any exemption under serial no. 263A (ii) of the Exemption Notification which allowed payment of Additional Duty at the rate of 1% only in the Bills of Entry in view of the decision of the Supreme Court in M/S SRF LTD. M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS CHENNAI COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) NEW DELHI 2015 (4) TMI 561 - SUPREME COURT . The petitioner in view of the decision in Supreme Court in ITC made an application for amendment of the Bills of Entries under section 149 of the Customs Act so that after that the duty could be refunded. The application filed by the petitioner was however rejected. In view of the decisions of the Bombay High Court in DIMENSION DATA INDIA PRIVATE LTD. VERSUS COMMISSIONER OF CUSTOMS AND ANR. 2021 (1) TMI 1042 - BOMBAY HIGH COURT and the Telangana High Court in M/S. SONY INDIA PVT. LTD. VERSUS UNION OF INDIA AND ANOTHER 2021 (8) TMI 622 - TELANGANA HIGH COURT the respondent can take recourse to appropriate proceedings including the provisions of sections 149 and 154 of the Customs Act for either amendment of the Bills of Entry or for correction of the Bills of Entry. It is expected that if such applications are now filed by Vivo Mobile the same would be adjudicated expeditiously as the refund applications were filed in 2015. It is therefore ordered that in the event applications are now filed by Vivo Mobile they shall be decided expeditiously and preferably within a period of three months from the date of filing of the applications - Appeal disposed off.

Summary

Issues Involved:

1. Eligibility for Reduced Additional Duty
2. Necessity of Re-assessment of Bills of Entry
3. Unjust Enrichment and Refund Claim
4. Applicability of Sections 149 and 154 of the Customs Act for Amendment/Correction of Bills of Entry
5. Maintainability of Refund Applications without Modification of Assessment Orders

Issue-wise Detailed Analysis:

1. Eligibility for Reduced Additional Duty:
Vivo Mobile claimed a reduced Additional Duty at the rate of 1% under a notification dated 17 March 2012, which required that no credit under the CENVAT Credit Rules 2004 be taken. The Deputy Commissioner, referencing the Supreme Court's decision in SRF Ltd., agreed that Vivo Mobile was eligible for the reduced rate, as the conditions were met.

2. Necessity of Re-assessment of Bills of Entry:
The Deputy Commissioner initially held that re-assessment of the bills of entry was not necessary, relying on the Delhi High Court decision in M/s. Micromax Informatics Ltd. vs. Union of India. The High Court had determined that an authority must entertain a refund application even if no appeal was filed against the assessment order.

3. Unjust Enrichment and Refund Claim:
The Deputy Commissioner found that although the refund application was filed timely, Vivo Mobile had not proven that the incidence of Additional Duty was not passed on to the buyers, thus invoking the doctrine of unjust enrichment. Consequently, the refund amount was directed to be credited to the Consumer Welfare Fund.

4. Applicability of Sections 149 and 154 of the Customs Act for Amendment/Correction of Bills of Entry:
Vivo Mobile argued that amendments or corrections could be made under sections 149 and 154 of the Customs Act, even at the stage of refund. The Bombay High Court in Dimension Data India and the Telangana High Court in Sony India supported this view, allowing amendments based on existing documentary evidence and correction of clerical errors at any time.

5. Maintainability of Refund Applications without Modification of Assessment Orders:
The Supreme Court in ITC Ltd. held that refund applications under section 27 of the Customs Act are not maintainable unless the assessment order is modified. However, it was clarified that modifications could be made under other provisions, including sections 149 and 154. The Tribunal, considering this, allowed Vivo Mobile to seek amendments or corrections before filing refund applications.

Conclusion:
The Tribunal concluded that Vivo Mobile could invoke sections 149 and 154 for amending or correcting the bills of entry. It directed that any applications filed by Vivo Mobile for such amendments or corrections should be decided expeditiously, within three months, and subsequent refund applications should also be processed promptly.