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2016 (5) TMI 439 - CESTAT BANGALORE

2016 (5) TMI 439 - CESTAT BANGALORE - 2016 (333) E.L.T. 435 (Tri. - Bang.) - Admissibility of refund of redemption fine and penalty - Redemption fine and penalties have been paid by the appellant and not by the 11 importers, and technically speaking the TR-6 challans have been issued in the name of the 11 importers - Revenue submitted that in terms of the provisions of Section 27 of the Customs Act, duty and interest, if any, paid on the goods can be claimed in a refund by any person who has pai .....

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tands allowed on the merits of the case only. In such a scenario, the refund arising out of the said order of the Tribunal would be available to the importers only and the fact that whether the money for the said deposits were provided by the exporters or not, would make no difference.

Section 27 of the Customs Act which relates to the refund of any duty and interest paid by an assessee, in terms of an order of assessment relates to payment of duty and interest only and does not cover .....

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ho has actually provided money to the person depositing the same. The law recognizes only the importers and by setting aside the redemption fine and penalties imposed upon them, it is the importers only who are recognized by law for the purpose of refund of the amounts in question. Therefore, no reason to interfere in the impugned orders. - Decided against the appellant - C/275/2009-DB - Final Order No. 22112/2015 - Dated:- 29-10-2015 - Ms. Archana Wadhwa, Member (J) and Shri Ashok K. Arya, Memb .....

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at Cochin Port. 2. On receipt of the cargo at Mangalore, which was declared as Superior Kerosene Oil (hereinafter referred as SKO) was suspected to be Aviation Turbine Oil (hereinafter referred to as ATF) and the matter was taken up for investigation by the DRI. During the course of investigations, statements of various persons were recorded and samples were drawn and got tested. Based upon the same, proceedings were initiated against the appellant by way of issuance of show cause notice. .....

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gly all the importers abandoned the cargo. 4. Proceedings initiated by the department by way of various show cause notices resulted in passing of an order by the Commissioner being orders-in-original No. 3/2003 to 13/2003, dated 7-10-2003 holding that the cargo was liable to confiscation as the same was ATF and not SKO. He further observed that inasmuch as the importers have refused to take delivery of the goods on the ground that the product did not match the specifications of SKO and have .....

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owner of the goods, such penalties and redemption fines were deposited by the respective importers out of the money sent by them from Dubai by way of Demand Draft issued by the Standard Chartered Bank to the various importers. 5. The said order of the Commissioner was challenged by the appellant before the Tribunal, who vide their Final Order No. 953-964/2006, dated 23-5-2006 [2006 (205) E.L.T. 1041 (Tribunal)] set aside the same and held that the confiscation ordered by the Commissioner a .....

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ave remitted the fine and penalty on behalf of 11 importers, even though technically TR-6 challans were in the name of the importers, and as such, it is they who would be entitled to the refund of the dues deposited by the said importers. Accordingly, they filed refund claim of the same on 07/14-5-2007. They also produced TR-6 challans as also the documentary evidences giving details of the Demand Drafts issued by Standard Chartered Bank, Dubai in the name of the importers. 7. On the above .....

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ordingly, notice proposed to reject the refund claims. 8. The said notice was adjudicated by the Commissioner vide his present impugned order by referring to the provisions of Section 27(1) of the Customs Act, 1962. He held that inasmuch as the fines and penalties were deposited by the importers in whose name TR-6 Challans stand issued and in no document the name of the appellant appear, the claim of refund by the appellant is against the provisions of Section 27. He also observed that out .....

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can be made only to them and not to the present appellant. He accordingly rejected the same. Hence the present appeal. 9. Learned advocate Shri G. Shivadas appearing for the appellant submits that the Commissioner, while passing the first order of confiscation of the goods and while allowing re-export of the cargo to the present appellant i.e. the exporter of the goods, has clearly observed that he continues to be the owner of the entire consignment inasmuch as importers have not paid him. .....

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and penalties on the importers. Such option to redeem the goods on payment of redemption fine should have been given only to the owner of the goods, in terms of the provisions of Section 125 of the Customs Act, 1962. It was in these circumstances that the importers refused to pay redemption fine and penalties and inasmuch as the cargo was to be re-exported by the appellant, the said redemption fines and penalties were deposited by the appellant only through the 11 importers. He further submits .....

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and penalties has been set aside by the Tribunal thus leading to the fact that the same was an unjustifiable order. With the setting aside of the order of the Commissioner, the appellant s claim for refund of the redemption fine and penalties should be allowed, once it is established by them that they are the owner of the goods imported and the fine and penalty stands paid by them. He also submits that 7 parties have given No Objection letters to the appellant and the Revenue should not be allow .....

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Revenue submits that in terms of the provisions of Section 27 of the Customs Act, duty and interest, if any, paid on the goods can be claimed in a refund by any person who has paid or borne it. Duty liability is on the goods under the Customs Act and when the goods change hands between the seller and the purchaser, the duty paid by the seller on such goods will be borne by the purchaser. It is in these conditions that the title holder of such duty paid goods becomes eligible for refund subject t .....

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ral Excise Act providing for recovery of fine and penalty from another person. If that be so, the refund of such fine and penalty on success of the appeal cannot be granted to any other person who has not deposited the same. In the present cse, fine and penalty was paid by the importers separately by way of individual TR-6 challans and the internal arrangement between the importers and the exporter of the goods cannot be taken into consideration while deciding the refund claims of the same in te .....

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e about the earlier order-in-original imposing redemption fine and penalty and the same having been set aside by the Tribunal. The question which arises is as to whether the claim of refund of redemption fine and penalty, as a consequence of allowing of their appeal, would be admissible to the present appellant, who was allowed to re-export the goods. 12. We now refer to the earlier order of the Commissioner who while allowing the exporter to re-export the goods imposed redemption fine and .....

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lties were to be imposed, it should have been upon the exporter. The Tribunal considered the merits of the case and allowed the appeal on merits and not on the issue that while allowing re-export, the redemption fine and penalties should not have been imposed upon the importers. 13. When the said appeals of the importer were allowed by the Tribunal on merits of the case, as a consequence, the importers became entitled to the refund of the redemption fine and penalty so paid by them. As such .....

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ee procured the money. Hypothetically, presuming if an assessee for payment of dues to the Revenue, takes loans from one Mr. A , can Mr. A approach the Revenue for refund of the said deposits so paid by the assessee, on success of the assessee s appeal before the Tribunal. Admittedly, it is the money of Mr. A which stand taken on loan by the assessee and stands deposited by him with the Revenue. Even then Mr. A would not have any locus standi to approach the Revenue and request for refund of the .....

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