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Commissioner of Customs Versus M/s. Ace Designers & Customs, Excise & Service Tax Appellate Tribunal

Refund claim - Reassessment - Whether re-assessment can be permitted at the refund stage when the order of assessment is final and not appealed against or not - Held that:- New notification is pressed into service, at a belated stage, for claiming refund of the excess duty paid and without challenging the order of assessment. The facts in the present case are clearly distinguishable as we find that a new plea is taken at the time of refund by placing reliance on Notification No.18/2000-Cus. The .....

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ndia) Pvt. Ltd. case [2000 (8) TMI 88 - SUPREME COURT OF INDIA] and Priya Blue Industries case (2004 (9) TMI 105 - SUPREME COURT OF INDIA) are squarely applicable to the facts of the present case. - Decided in favor of revenue. - C.M.A. NO. 3193 OF 2008 - Dated:- 20-3-2015 - R.Sudhakar And R.Karuppiah JJ. For the Appellant : Mr. E.Vijay Anand For the Respondents : No Appearance Judgment (Delivered By R.Sudhakar, J.) Aggrieved by the order of the Tribunal in allowing the appeal filed by the asses .....

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-importation of CNC Lathe Machine Model LT-20C under Bill of Entry No.024656 dated 13.08.01. The goods were assessed to 'NIL' rate of customs duty, 16% of excise duty and 4% SAD. The said machine was re-imported and, therefore, the first respondent claimed the benefit of Notification No.94/96-Cus dated 16.12.1996. According to the 1st respondent, it re-imported the goods in order to avoid demurrage charges, therefore, SAD was paid, though it was not required by law. The bill of entry was .....

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he Deputy Commissioner of Customs came to hold that in the present case, the Notification 94/96-Cus. alone is applicable and the benefit of Notification No.18/2000-Cus. will not be applicable. The plea of the 1st respondent that Section 3A is applicable only to imported goods and not to re-imported goods was negatived by placing reliance on the provisions of Section 20 of the Act. For better clarity, the relevant portion of the order of the original authority is extracted hereinbelow :- "I .....

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ted from payment of such much of the duty of the customs leviable thereon specified in the I schedule the additional duty under Sec.3 of the Customs Tariff Act, 1975 and Special Additional Duty of Customs (SAD) leviable under sub sec. of 3A of CTA 1975 subject to the relief in the Customs Notification 94/96. From the above, it is clear that as per Customs Notification 94/96, the levy under Section 3A of the Customs Tariff Heading is not exempted for indigenous goods under the Notification 94/96. .....

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tification 18/2000 will not be applicable. Hence, I pass the following order :- ORDER In view of the above findings, I reject the refund claim of M/s.ACC Designers for refund of SAD for ₹ 66,528/= (Rupees Sixty Six Thousand Five Hundred and Twenty Eight only) against their Bill of Entry No.24656 dated 13.08.01." 3. Aggrieved against the said order, the 1st respondent preferred appeal before the Commissioner (Appeals), who also dismissed the appeal of the 1st respondent holding that th .....

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not the very levy of additional duty, which is equivalent to excise duty. The Commissioner (Appeals) further held that the goods are not exempted from levy of additional duty and Notification No.18/2000-Cus. is not enforceable. The Commissioner (Appeals) further held that there was nothing to hold that the order of the lower authority denying the benefit of Notification No.18/2000-Cus. dated 1.3.2000 is per se illegal and, consequently, the rejection of refund by the lower authority was in order .....

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e additional duty of Customs leviable thereon under sub-sec (1) of Section 3 of the Customs Tariff Act are liable to be charged to "nil" rate of duty. Here, I concur with the lower authority that the said notification did not distinguish between import of indigenous or non-indigenous goods. The only pre-condition to avail exemption from levy of SAD was that the goods should be exempted wholly from customs duty and additional duty/CVD. However, the assessment and the Bill of Entry lucid .....

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ther held that the claim of the 1st respondent could not be accepted for the following factual reason :- "However, it is not difficult to see that in the case of the impugned goods which were earlier exported under bond without payment of Central Excise duty and have been subsequently imported have been obviously charged to additional duty of Customs equal to the Central Excise duty and that basic Customs duty and special Customs duty is exempted. Going by the ratio of the judgment, I do no .....

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are imported originally. Levy of special additional duty is governed by the provisions enshrined in Section 3A of the Customs Tariff Act, 1975. The provisions covered under the Section do not expressly distinguish between import of indigenous and non-indigenous products nor do they exempt re-import of indigenous goods from levy of SAD. In the circumstances, the contention of the appellant is not legally tenable." 6. Going further, the Commissioner (Appeals) also held that it is an admitted .....

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ELT 145 (SC)). The Commissioner (Appeals) also held that the refund claim is not an appeal proceedings and the Officer considering the refund claim cannot sit in appeal over the assessment made by a competent officer. Consequently, rejecting the appeal, the following order was passed :- "Notwithstanding the legal positions and facts of the case discussed supra, it is anybody's case that the amount of duty was collected in pursuance to the orders of assessment. Hence, the question of ref .....

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that once an order of assessment is passed, the duty would be payable as per the order. Unless the order of assessment has been reviewed under Section 28 and/or modified in an appeal that order stands so long as the order of assessment stands the duty would be payable as per the order of assessment. A refund claim is not an appeal proceeding. The officer considering the refund claim cannot sit in appeal over an assessment made by a competent officer. The officer considering the refund claim can .....

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paid by the appellant, stands and no refund of duty accrues to the claimant as these orders of assessment are not modified or reviewed by an appeal." 7. Aggrieved against the order of the Commissioner (Appeals), the 1st respondent filed appeal before the Tribunal. The appeal, however, came to be allowed by the Tribunal on the premise that the case of the assessee is covered by the decision of the Supreme Court in Karnataka Power Corporation Ltd. - Vs - Commissioner of Customs (Appeals), Ch .....

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r refund is not maintainable as has been consistently held by the Supreme Court in a catena of decisions, more particularly the decision in Priya Blud Industries case (supra). It is further submitted by the learned standing counsel for the appellant that the importer having not claimed the benefit of Notification No.18/2000 either before the goods were assessed by the proper officer or during assessment and cleared it after payment of duty, cannot, at a belated stage, i.e., at the time of refund .....

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were exempt only from customs duty by enforcing Notification No.94/96 and not from additional duty, which is equivalent to Excise duty. The Commissioner (Appeals) has rightly held that the 1st respondent is not entitled to refund, which has not been appreciated in its proper perspective by the Tribunal and, therefore, the order of the Tribunal is liable to be set aside. 9. Heard Mr.Vijay Anand, learned standing counsel appearing for the appellant/Revenue and also perused the documents available .....

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ner (Appeals) as well as the Tribunal in support of their findings and decision. 12. In Priya Blue Industries case (supra), the facts as could be culled out from the said decision as is set out in para-2 of the said judgment would reveal that reasons have been given for rejecting the claim for automatic refund. The Supreme Court, placing reliance on Collector - Vs - Flock (India) Pvt. Ltd. (2000 (120) ELT 285 (SC)), held as follows :- "5. Under Section 27 of the Customs Act, 1962 a claim fo .....

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onsidering the claim for refund. It was submitted that the wording of Section 27, particularly, the provisions regarding filing of a claim for refund within the period of 1 year or 6 months also showed that a claim for refund could be made even though no Appeal had been filed against the Assessment Order. It was submitted that if a claim for refund could only be made after an Appeal was filed by the party, then the provisions regarding filing of a claim within 1 year or 6 months would become red .....

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at order of assessment has been reviewed under Section 28 and/or modified in an Appeal that Order stands. So long as the Order of Assessment stands the duty would be payable as per that Order of Assessment. A refund claim is not an Appeal proceeding. The Officer considering a refund claim cannot sit in Appeal over an assessment made by a competent Officer. The Officer considering the refund claim cannot also review an assessment order. 7. We also see no substance in the contention that provision .....

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person who has paid duty in pursuance of an Order of assessment to claim refund. These words do not lead to the conclusion that without the Order of assessment having been modified in Appeal or reviewed a claim for refund can be maintained. In our view, the ratio in Flock (India)'s case (supra) fully applies. We, therefore, see no substance in the Review Petition. Accordingly, the Review Petition stands dismissed with no order as to costs." 13. In Karnataka Power Corporation Ltd. case .....

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hat the appellant had sought for amendment before the Assistant Commissioner of Customs and in that view of the matter, refund was claimed. Therefore, the issue was at large before the competent authority. The facts, as narrated above, would reveal that the decision in Karnataka Power Corporation case (supra) relied on by the Tribunal is distinguishable on facts, as the issue on classification as well as refund was at large before the appellate authority. However, in the case on hand, such is no .....

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vertence without there being an order of assessment and in such a dispute, the question before the Court was whether the payment of duty will deprive the importer of his right to file refund under Section 27 of the Customs Act. However, the facts in the present case are totally different from the one before the Delhi High Court. The facts in the present case is that a new notification is pressed into service, at a belated stage, for claiming refund of the excess duty paid and without challenging .....

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