TMI Blog2013 (9) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... d payment made was pursuant to provisional assessment - The longer of the two periods i.e. the period specified under Section 27 or the notification dated 1st August, 2008 read with Circular No. 23/2010–Custom dated 29th July, 2010 would be applicable - The petitioner had filed the claims within the period stipulated by section 27 of the Act, in view of the construction given by us, the same could not have been rejected on the ground of limitation. Circular No. 23 of 2010 was issued on 29.07.2010 stipulating a limitation of one year from the date of payment of the duty at the time of clearance of the imported goods - If the period in the circular was to be followed then some of the refund claims of the petitioner would become time barred and in others hardly any time would be left for the petitioner to make a claim - Where the imported goods were released on payment of CVD on regular assessment, the application seeking refund can be made within one year of the payment of the CVD in terms of the notification dated 1st August, 2008 read with Circular No. 23/2010–Custom dated 29th July, 2010. Where the goods were released on provisional assessment followed by the final assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of a related party transaction, Customs Authorities referred the case to the Special Valuation Branch of the Customs for the purposes of valuation and clearance. Pending valuation by the Special Valuation Branch, all bills of Entry were cleared by the Customs Authorities provisionally under Section 18 of the Act. After valuation by the Special Valuation Branch of the Customs, the liability was determined and the importer i.e. the petitioner then applied for finalisation of the Bill of Entry. On the finalisation of the Bill of Entry, the final duty was assessed and the provisional duty paid was adjusted towards the final assessment. The said procedure is followed in related party transactions. In case, any additional duty is payable on final adjudication, the importer is liable to pay the same and where the provisional duty is more than the final duty assessed the importer is entitled to the refund of the same. 5. On 14.09.2007 notification No. 102/2007-Customs was issued by the Ministry of Finance, Government of India in exercise of powers conferred by Sub-section 1 of Section 25 of the Act. Vide the said notification, the Central Government exempted the goods falling within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt with by the said circular related to the fixation of time limit for filing an application for refund. In respect of the same, the circular provided as under: 4. Time Limit: 4.1 In the Notification No.102/2007- Customs dated 14.9.2007, no specific time limit has been prescribed for filing a refund application. Under the circumstances, a doubt has been expressed that whether the normal time-limit of six months prescribed in section 27 of the Customs Act, would apply. In the absence of specific provision of section 27 being made applicable in the said notification, the time limit prescribed in this section would not be automatically applicable to refunds under the notification. Further, it was also represented that the goods imported may have to be despatched for sale to different parts of the country and that the importer may find it difficult to dispose of the imported goods and complete the requisite documentation within the normal period of six months. Taking into account various factors, it has been decided to permit importers to file claims under the above exemption upto a period of one year from the date of payment of duty. Necessary change in the notification is being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Section 27 of the Act applies because of the statute i.e. the Act and does not require clutches of a notification for application. The aforesaid clarification in form of a circular can be also challenged and questioned to the extent that it withdraws or curtails beneficial provisions of Section 27 of the Act. The circular records that representations had been received from the importers, who had found it difficult to dispose of the exported goods and complete the requisite documentation within the normal period of six months. This period of six months is specified in Section 27 of the Act. The Board keeping in view the aforesaid factors had decided to permit importers to file claims for exemption upto a period of one year, i.e., the time limit specified in Section 27 of six months, was extended to one year, but with certain stipulations, namely; (i) Unsold stock would not be eligible for refund; (ii) For one bill of exchange a single applicable would be maintainable; (iii) The claim would be entertained on monthly basis, i.e., single refund claim irrespective of number of bills of entry processed in that month by the respective Commissionerate; (iv) The refund claims wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisional assessment. The Importer, therefore, would be eligible to get the refund, if the claims is filed within one year of the date of actual payment of 4% CVD i.e. the date of payment of duty at the time of clearance of imported goods. (Underlining supplied) 12. Circular dated 29th July, 2010 seeks to explain notification No. 93 of 2008 dated 1st August, 2008 and states as under: (i) Limitation of time specified for refunds under Section 27 of the Act is not applicable. (ii) Claims of refunds of 4% CVD under Circular dated 28th April, 2008 should be filed within one year of payment of duty, whether the assessment was provisional or final was immaterial. The reason given is that the notification has been issued under Section 25(1) of the Act and is subject to fulfilment of certain conditions; one of them being that the claim for refund should be made within one year from the date of payment of duty. Thus, in cases where assessment was provisional, date of payment of duty for CVD would be the actual date of payment and not the date of finalization of provisional assessment. In other words, the order finalizing the assessment will not determine the limitation of one y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 23.12.2010. The petitioner filed an appeal against the order dated 23.12.2010 before the Commissioner of Customs(Appeal) which appeal has also been dismissed vide order dated 27.4.2011 and the said order dated 27.4.2011 is also impugned in the present petition. The third claim filed by the petitioner with respect to the third set of bill of exchange was also rejected on the same ground by the Assistant Commissioner (Refund) vide order dated 28.2.2011 and the petitioner has filed an appeal on 11.4.2011 against the said order before the Commissioner of Customs (Appeals). 18. The case of the petitioner is that by the impugned notification and circular, the Central Government has created a situation whereby a person would need to file an application for refund even before the assessment is finalized as the time limit for making an application has been prescribed to commence from the date of payment of the provisional duty for release of the goods and not the final assessment of duty. 19. Learned counsel for the petitioner further contended that Section 27 which relates to claim for refund of duty, period for limitation prescribed is one year or six months as the case ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nally assessed. (2) When the duty leviable on such goods is assessed finally in accordance with the provisions of this Act, then (a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed and if the amount so paid falls short of, or is in excess of, [ the duty finally assessed], the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be; (b) in the case of warehoused goods, the proper officer may, where the duty finally assessed is in excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty. (3) The importer or exporter shall be liable to pay interest, on any amount payable to the Central Government, consequent to the final assessment order under sub-section (2), at the rate fixed by the Central Government under section 28AB from the first day of the month in which the duty is provisionally assessed till the date of payment thereof. (4) Subject to sub-section (5), if any refundable amount referred to in clause (a) of sub-section (2) is not refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it had always been the part of the first such notification or order, as the case may be. (3) An exemption under sub- section (i) or sub- section (1) in respect of any goods from any part of the duty of customs leviable thereon (the duty of customs leviable thereon being hereinafter referred to as the statutory, duty) may be granted by providing for the levy of a duty On such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any goods in the manner Provided in this sub- section shall have effect subject to the condition that the duty of customs chargeable on such goods shall in no case exceed the statutory duty. Explanation.-" Form or method", in relation to a rate of duty of customs, means the basis, namely, valuation, weight, number, length, area, volume or other measure with reference to which the duty . (4) Every notification issued under sub-section (1) or sub-section 92A) shall,-- (a) Unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette; (b) also be published and offered for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year or six months, as the case may be, shall be computed from the date of issue of such order]: [Provided also that where the duty becomes refundable as a consequence of judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year or six months, as the case may be, shall be computed from the date of such judgment, decree, order or direction.] Explanation [I]. For the purposes of this sub- section," the date of payment of [ duty and interest, if any, paid on such duty] in relation to a person, other than the importer, shall be construed as" the date of purchase of goods" by such person. [Explanation II. Where any duty is paid provisionally under section 18, the limitation of one year or six months, as the case may be, shall be computed from the date of adjustment of duty after the final assessment thereof.] 25. Before we elucidate upon Section 18, we would like to examine the provisions of Section 25 of the Act. The said Section empowers the Central Government to issue a notification in the Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute. In later cases, circulars can supplant the law but not supplement the law. 28. Section 27 of the Act is a general provision relating to refund of any duty. Dictionary meaning of the word any can indicate all or every as well as some or one . Usage depends upon the context of subject matter. In the context of Section 27 of the Act, the word any duty should and would encompass all and every type of refund payable under the Act and in terms of the notification issued under Section 25. 29. Third proviso to Section 27 clears any possible ambiguity and this proviso refers to special order under Section 25(2), which is like a notification and states that the period of limitation of one year or six months as the case may be, shall be computed from the date of issue of such order. Contention of the respondent that notification under Section 25 must specifically invoke Section 27 is misconceived. Notification under Section 25 of the Act is issued under the statute i.e. the principal enactment itself and refund of duty under Section 27 means and includes any type of refund whether payable in view of appellate orders, adjudication order or pursuant to a notification or exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apparent and logical. Till final adjudication order is passed and duty is ascertained, quantum of the duty paid or payable is uncertain. The amount of refund will be determinable upon final assessment and not earlier. Even when there is an exemption and duty is refundable post import, the refund cannot be ascertained and will be fluctuating till final assessment order is passed. The quantum of refund would depend upon the final adjudication and not upon provisional assessment. No person can lodge a claim for refund without knowing or quantifying the amount which is to be refunded. As per the final adjudication, refund may not be payable, or quantum thereof may increase or decrease. 33. Explanation II to Section 27 should not create any difficulty as one should expect that the final adjudication order would be passed within a reasonable time or shortly after provisional assessment. 34. In the present case, for the three claim of the petitioner, the relevant dates are as under: Provisional payment date Final Assessment date Claim lodging date 31.12.2008 to 13.03.2009 09.07.2010 30.07.2010 04.04.2009 to 12.08.2009 09.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appellate orders or court orders or otherwise in terms of exemption notification under Section 25(1) or special orders under Section 25(2) of the Act. iv. The expression date of payment used in notification No. 93 of 2008 dated 1st August, 2008 can mean the date of final assessment. The said interpretation would be in accordance and as per explanation II to Section 27. Similar expression has been used in Section 27(1). Circular issued on 29th July, 2010 accepts that in some cases refunds under the notification dated 1st August, 2008 had been issued on a claim being made within one year from date of final assessment and beyond one year from the date of provisional assessment. The circular however, stipulates that the claim for refund would be entertained under the notification dated 1st August, 2008, if it is made within one year from payment of duty and not final assessment. This, may result in reducing the period. Assuming that the issue of date of payment was debatable, the Board did not deem it appropriate to fix a period or time limit during which claims of refund should be entertained in cases where the Assessee bonafidely believed and were acting on the presumption tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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