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2015 (4) TMI 990 - MADRAS HIGH COURT

2015 (4) TMI 990 - MADRAS HIGH COURT - 2015 (329) E.L.T. 109 (Mad.) - 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 t .....

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s) is clearly sustainable. - decision of the Supreme Court in Flock (India) 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 .....

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imed refund of Special Additional Duty (for short 'SAD') on re-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, .....

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e refunded. Placing reliance on Section 20 of the Customs Act, 1962, the 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 th .....

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goods re-imported (if identity is established) and specifically exempted 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 Head .....

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. In the instant case, Notification 94/96 only still applicable but Notification 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 .....

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y from customs duty by enforcing Notification No.94/96 Sl.No.1(E) and 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, con .....

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toms leviable thereon under the first schedule and (b) the whole of the 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 ad .....

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18/2000-Cus. dated 01.03.2000." 4. The Commissioner (Appeals) further 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 .....

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ppellant has also contended that SAD is applicable only to goods which 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. Goin .....

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dustries Ltd. - Vs - Commissioner of Customs (Preventive) (2004 (172) 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 collecte .....

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04 in the Civil Appeal No.9405 of 2003, the Supreme Court has observed 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 mad .....

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sed above, the order of assessment, in pursuance to which the duty was 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 Karnata .....

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respondent having not challenged the order of assessment, the claim for 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 pa .....

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ct cannot be sustained. Further the Bill of Entry shows that the goods 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 appear .....

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find out the applicability of the judgments relied on by the Commissioner (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 fo .....

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d and the correctness of the Assessment Order can be examined whilst considering 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 .....

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sment is passed the duty would be payable as per that order. Unless that 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 assessme .....

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/person who can make a claim for refund. In other words, they enable a 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 .....

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be held to be time barred. In that case, it is clear from the order that 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 be .....

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pra) is a case where the assessee paid higher rate of duty due to inadvertence 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 stag .....

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