TMI Blog2014 (12) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, appeals and reviews. There is no clarification whatsoever in this connection. The Ministry of Commerce per se did not have any statutory power either to process the refund claims or entertain appeals or reviews. The powers can be shifted into another authority if a valid law is made in order to do so. By a mere letter, Ministry of Finance could not have suspended the power of Commissioner(Customs) to exercise his statutory functions. It is undisputed that duty was collected by the Commissioner of Customs. Whatever be the character of the duty, the Commissioner of Customs collected the same on a perceived opinion that unit concerned was required to pay such customs duty, redemption fine or penalties as the case may be. If later on such duty, fine or penalty is declared illegal, the person from whom the same has been collected would have a right to seek refund thereof. Such right would be covered by statutory provisions particularly, section 27 contained in the Customs Act, 1962. Such refund application would have to be made within the time permitted under section 27 of the Customs Act, 1962. It may also be subject to verification on the question of unjust enrichment. Many ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility for processing such refund claims of the SEZ units. 2. As a test case, we may record the facts arising in Special Civil Application No.11876/2014. M/s. Anita Exports is a partnership firm, petitioner no.1 is a SEZ unit located in Kandla SEZ. The unit imported certain raw materials at Kandla. The goods were declared as used garments. The Commissioner of Customs, Kandla, however, disputed the valuation as well as the declaration of the goods made by the petitioners. He was prima facie of the opinion that the valuation of the imported goods declared by the petitioners was undervalued and further that the consignment did not contain used and old garments. A show cause notice dated 1.3.2012 therefore, came to be issued by the Commissioner(Customs) on the premise that value of goods was not ₹ 70,64,917/as declared but actually was ₹ 3,18,42,650/- and further that the imported consignment was not of worn clothes but clothes and other mixed goods. On such basis, he called upon the petitioners to show cause why : (a) the declared value of ₹ 70,64,917/- for the goods imported in 25 containers and detailed in the annexure should not be rejected under Rule 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) under section 125(1) of the Customs Act, 1962. (iv) I impose a penalty of ₹ 10,00,000/( Rupees Ten Lakhs only) under section 112(a) of the Custom Act, 1962 on M/s. Anita Exports. (v) I also propose a penalty of ₹ 2,50,000/( Rupees Two lakhs fifty thousand only) under section 112(a) of the Customs Act, 1962 on Shri Juned Yakub Nathani, Partner of M/s. Anita Exports. 4. Since during the adjudication of the show cause notice, the petitioners had deposited an ad hoc amount of ₹ 25 lakhs with the Customs authority, the Commissioner of Customs passed addendum to the order-in-original appropriating such amount already deposited by the petitioners. 5. The petitioners challenged such order of the Commissioner(Customs) before the Customs Excise Service Tax Appellate Tribunal ( the Tribunal for short). The Tribunal allowed the appeal of the petitioners in part. Insofar as the goods which were in conformity with the letter of authority, the Tribunal was of the opinion that the Commissioner(Customs) did not have the power to adjudicate the issue concerning confiscation of such goods. To such extent, the order of the Commissioner was set aside. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication dated 1.11.2012 issued by the Additional Director, Director General of Export Promotion (Ministry of Finance), New Delhi all the refund applications are required to be returned to the applicants whose units fall under the SEZ. The petitioners were requested therefore, to approach the Department of Commerce for refund. Along with this communication, a copy of said letter dated 1.11.2012 was also annexed. It would be necessary to record the contents of the said letter which reads as under: Kindly refer to DGEP letter F.No.DGEP/SEZ/25/2011 dated 03.05.2010 on the above subject requesting for view on issue regarding proper officer for sanction of refund of Customs Duties paid on clearances made from SEZ. The reports received from the Chief Commissioner indicate that in some zones refund claims relating to excess Customs Duty paid by SEZ entities have been received. Such refund claims are reportedly not being disposed of by the CBEC field formations on the ground that as per Section 27 of the Customs Act, 1962 all refund of customs duties are to be dealt with by the Deputy/Asst. Commissioner of Customs in whose jurisdiction the goods are imported and that the refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stry of Commerce from time to time requesting to make explicit provisions in the SEZ Act and Rules made thereunder for refund of excess Customs Duty/ Fine/Penalty/Security Deposit etc. The issue is under consideration at interministerial level to devise a proper framework for refund, review and appeal in respect of the same. Therefore, at present this office has no jurisdiction over processing and sanction of refund claims. In view of the above, your refund cannot be processes by this office until the incorporation of statutory provision in the SEZ Act or Rules made thereunder that authorizes Deputy Commissioner of Customs/Specified Officer or any such officer of this office to sanction the refund of excess Customs Duty/Fine/Penalty/Security Deposit etc till that time you may approach to the jurisdictional Customs Authority(Refund) to file your refund claim. Accordingly, your aforesaid original application for refund claim along with all enclosures are returned herewith. 10. At that stage, the petitioners filed this petition and prayed for a declaration that the Customs authorities functioning under the Customs Act, 1962, would be the proper authority to decide the refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions had to be returned to the applicants with a advise to approach the Department of Commerce. It was further conveyed that if any appeal was pending, same may also be returned for approaching the Department of Commerce. 14. Two things immediately emerge from this letter. Firstly, that the Ministry of Finance also recognised that there was no mechanism under the SEZ Act and Rules framed thereunder for entertaining refund applications and secondly, that the Ministry was of the opinion that such a set up was required to be made by making suitable changes in law. In fact the communication does not stop short at covering refund applications for such treatment. It refers to appeals and reviews of proceedings concerning SEZ units. All such applications would be returned to the parties who would be advised to approach the Department of Commerce. 15. In our opinion, the entire approach was thoroughly incorrect. Firstly, without making statutory changes, it was simply not possible for the Ministry of Finance by a mere communication to stop the Commissioner of Customs from processing refund claims which was his statutory duty. Secondly, if such mechanism was to be changed for SEZ uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat whole or part of the duty or interest paid by the applicant is refundable, to make an order accordingly. Proviso to subsection(2) statutorily embodies the principle of unjust enrichment. 17. In case of Mafatlal Industries Ltd. and ors. v. Union of India and ors. reported in (1997) 5 Supreme Court Cases 536, the Constitution Bench of Supreme Court considered the statutory provisions under the Customs Act, 1962 and the Central Excise Act and held that any claim for refund would be covered by section 27 of the Customs Act or 11B of the Excise Act as the case may be. It was observed as under: (i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter by misinterpreting or misapplying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or misinterpreting or misapplying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
