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Anita Exports - A Partnership Firm & 1 Versus Union of India & 2

2015 (10) TMI 762 - GUJARAT HIGH COURT

Claim for Refund of Penalty – Mis-declaration of goods – Penalty imposed - Commissioner (Appeals) annulled the adjudication order passed by Assistant Commissioner of Customs – As such, refund claim filed by the Petitioners with KASEZ, Gandhidham refused to refund the claim stating that there are no provisions in SEZ Act for refund of excess customs duty paid by SEZ units – Petitioner contended that Respondents have no authority to retain the amount paid towards penalty under the adjudication ord .....

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f the Respondent are premature, cannot be countenanced - Petitions succeed and allowed – Decided in favour of the Petitioner. - Special Civil Application No. 5983 of 2015, Special Civil Application No.5991 of 2015 - Dated:- 23-9-2015 - Harsha Devani And A G Uraizee, JJ. For the Petitioner : Kuntal A Parikh, Adv., Mr Paresh M Dave, Adv., P R Gupta, Adv For the Respondents : Mr Devang Vyas, Adv., Mr Rj Oza, Adv., Priyank P Lodha, Adv ORDER ( Per : Honourable Ms. Justice Harsha Devani ) 1. Rule. .....

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ich lies in a very narrow compass, with the consent of the learned counsel for the respective parties, the matters were taken up for final hearing today. 4. For the sake of convenience, reference is made to the facts as appearing in Special Civil Application No.5983 of 2015. 5. The petitioner firm has established a manufacturing unit at KASEZ for manufacture of industrial wipers. The petitioner firm was allowed to import worn and used clothing as raw materials and such raw materials were used in .....

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ngly, the buyer M/s Archee Trade Links filed a Bill of Entry for the above goods and declared the same as old and used mutilated rags, classifying the same under the Customs Tariff Heading 63101020. It was the case of the customs authorities that the local entities like the petitioner firm, who were in the nature of DTA units had, in collusion with SEZ units, mis-declared the goods by classifying them under CTH 63101020 because the customs authorities were of the view that such goods were classi .....

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and while ordering confiscation of the goods with redemption fine, imposed penalties on the petitioner firm as well as the purchaser/importer M/s Archee Trade Links. Pursuant to the said order, the petitioner deposited a total sum of ₹ 40,000/- being penalty imposed under the order-in-original. The petitioner firm also preferred an appeal before the Commissioner of Customs (Appeals), Kandla against the adjudication order. By an order-in-appeal dated 10.05.2013, the Commissioner (Appeals) .....

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udication order or decision fastening any liabilities on the petitioner firm for sale of the said goods had been made by any competent authority. The petitioner in the light of the fact that there is no adjudicated or concluded liability of any nature against the petitioner firm in respect of the sale of the above referred goods, filed a refund application dated 31.03.2014, claiming restitution of ₹ 40,000/- as a consequence of the adjudication order having been set aside by the Commission .....

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provision in the SEZ Act and rules or regulations made thereunder for refund of excess customs duty paid by SEZ units. The petitioner, thereafter, approached this court by way of a writ petition being Special Civil Application No.12654 of 2014 as the legitimate claim of the petitioner was being tossed between two Departments. By a judgment rendered on 20.11.2014 in the above referred writ petition, this court held that the Commissionerate of Customs would continue to hold the authority under sec .....

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5.12.2014, all such applications shall relate back to the first presentation before the Customs authority. However subsequently, the petitioners have received a letter dated 09.02.2015 from the office of the second respondent informing the petitioner and similarly situated parties that the cases were remanded back for re-adjudication by the Commissioner (Appeals), and the process of re-adjudication in all matters by the proper authority was pending and filing of refund claims at that stage was p .....

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the respondent authorities in the light of the order of adjudication made against them. However, the Appellate Commissioner having allowed the appeal preferred by the petitioners and having annulled the order on the ground of lack of jurisdiction on the part of the adjudicating authority, as on date, there is no adjudication against them, under the circumstances, the respondents have no authority to retain the amount paid by the petitioners towards penalty under the adjudication order. It was s .....

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back to the situation of a show cause notice, there was no provision under the Act which requires deposit of any amount at the stage of adjudication and that the only provision which requires deposit is section 35-F of the Act after the adjudication has quantified the liability towards duty. The court held that the respondents were, therefore, not entitled to hold on to the money merely because the adjudication was proceeding on the original show cause notice. It was pointed out that the specia .....

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onsideration by the Commissioner of Central Excise, insofar as the appeal before the CEGAT is concerned, the matter can be said to have been finally disposed of setting aside the order of the Collector. The court observed that the pre-deposit made by the petitioner under section 35F of the Act is thus liable to be refunded with interest. A deposit under section 35F is for availing the remedy of appeal. Such amount has to be returned when the appeal is allowed, as in the case at hand. The decisio .....

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withheld without any authority of law, it is liable to be refunded. Reliance was also placed upon the decision of the Allahabad High Court in the case of K. S. Steel Works v. Union of India, 1996 (83) ELT 29 (All.) as well as by the Punjab and Haryana High Court in the case of Raghu Exports v. Union of India, 2008 (229) ELT 655 (P & H), wherein a similar proposition of law has been laid down. It was, accordingly, urged that the retention of money paid by the petitioners by the respondent au .....

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adjudication by the proper authority in accordance with law and therefore, the claims for refund filed by the petitioners are thoroughly misconceived, inasmuch as, the defence of the petitioners has not been adjudicated on merits by the adjudication Commissioner. It was further submitted that the petitioner has made payment of penalty without any demur pursuant to the order-in-original and that such payment has not been made during the investigation or adjudication or during the pendency of app .....

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l which is pending for final hearing. It was, accordingly, urged that the petitions being devoid of merit, deserve to be dismissed. 8. Mr. Priyank Lodha, learned Central Government Standing Counsel for the respondents No.1 and 3, reiterated the submissions advanced by the learned counsel for the respondent No.2. 9. The facts are not in dispute. Orders-in-original came to be passed against all the petitioners herein levying duty and/or penalty and/or redemption fine. Pursuant to such orders-in-or .....

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riginal passed by the adjudicating authority, pursuant to which the amounts have been paid by the petitioners towards the duty and/or penalty and/or redemption fine, cease to have any existence in the eye of law. Under the circumstances, once the orders-in-original has been set aside, the second respondent has no authority in law to retain the amounts deposited by the petitioners towards duty and/or penalty and/or redemption fine under the orders-in-original, which subsequently have been annulle .....

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