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2016 (9) TMI 834 - CESTAT MUMBAI

2016 (9) TMI 834 - CESTAT MUMBAI - 2016 (343) E.L.T. 1193 (Tri. - Mumbai) - Rejection of refund claim - assessment - declared price - valuation - import of 24 consignments of Gambler - Duty Free Replenishment Certificate - Foreign Trade Policy - exemption of basic customs duty - lack of jurisdiction - Assistant Commissioner of Customs - alternative remedy of filing an appeal - section 128 of Customs Act, 1962 - section 27 of Customs Act, 1962 - rejection of declared value - rule 10A of Customs V .....

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nt, are orders or decisions. - Whether the first appellate authority was correct in restoring the refund claim to the jurisdictional competence of the original authority? - Held that: - on the day of rejection of the refund claim, the original authority was not under instructions to disregard refund claims that were submitted without an appellate order setting aside the assessment. The original authority determined ineligibility for the refund claim without any recorded or acceptable rationa .....

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cable to all assessments that preceded it - restoration of refund claim upheld - appeal dismissed - decided against Revenue. - C/762/2004 - A/89038/16/CB - Dated:- 2-8-2016 - Shri M V Ravindran, Member (Judicial) and Shri C J Mathew, Member (Technical) Shri M.K. Mall, Asstt. Commissioner (AR) for the appellant Shri Nimesh Mehta, Advocate for the respondent ORDER Revenue is aggrieved that the first appellate authority has, allegedly, unsettled a settled assessment to enlarge the scope of an appea .....

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values between US$ 1000 and US$ 1350 per MT, were subject to assessment by enhancing the value to US$ 1750 per MT. Importer paid the assessed duty and filed a claim for refund of ₹ 20,46, 849 being the differential additional duty of customs paid in consequence. The scheme entitles the importer to exemption of basic customs duty upto a value specified in the licence and the importer is charged with the additional duty of customs. Re-credit of excess value of ₹ 1,26,66,127 arising fr .....

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der section 27 of Customs Act, 1962, the original authority did not hold any part, or parts, of the claim to be barred by limitation prescribed therein. The rejection was also rendered without citing any statutory provision, administrative instruction or case law to justify the conclusion. 4. From the records available with us, it would appear that the enhancement was effected ostensibly in exercise of powers under rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1 .....

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the rule in question: 10A. Rejection of declared value. (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods too furnish further information including documents or other evidence and if, after receiving such information or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed .....

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n accordance with procedure prescribed, it also required the officer to comply with the valuation rules to arrive at the new assessable value which was also allegedly observed in its breach. 5. Commissioner (Appeals), in the impugned order-in-appeal no: 214/2004-MCH dated 18th May 2004, taking note that the importer was prevented from challenging the assessment owing to the failure to furnish an appealable order as prescribed in rule 10A supra, proceeded to set aside the enhanced value in the as .....

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of Customs [2002 (143) ELT 482] as well as the order dated 11th September 2001 incorporated in Customs Manual of Instruction issued by Central Board of Excise & Customs. The first appellate authority went on to render a finding that the enhancement was not only procedurally flawed but also not legally sustainable owing to lack of recorded evidence for doubting the declaration at the time of import. 6. It is the contention of Revenue that the first appellate authority had failed to take note .....

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f Excise & Customs while disregarding the circular no. 24/2004-Cus dated 10th March 2004 of the Central Board of Excise & Customs. We note that the former directs that claims for refund of duty by importers be disposed off on merit whereas the latter, relying on the decision of the Hon ble Supreme Court in re M/s Super Cassette Industries [2003 (58) RLT F9], M/s Motilal Dulchand [2003 (157) ELT A265] and M/s HCL Perot Systems Ltd v. Commissioner of Customs, New Delhi [dated 6th October 2 .....

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arguments in support of and against the appeal of Revenue. The factual matrix that emerges is that the refund claim was filed to resolve the dispute on the assessment of gambier and that the imported goods had been subjected to enhancement in value without following the procedure laid down in the Customs (Determination of Value of Imported Goods) Rules, 1988 to reject the declared value or in arriving at the assessable value. It is also not disputed in the review of the impugned order that the .....

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hancement of the declared value. There can be no two views that the order impugned before the first appellate authority was the rejection of the refund claim. We cannot, however, but note that the order of rejection did touch upon the assessment by drawing attention to the finality of the enhancement in the hands of the assessing authority. It is also on record that the enhancement was disputed in the appeal filed before the first appellate authority. Considering the contents of the pleas in the .....

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m and decide on the assessment, as insisted upon by the lower authority as a pre-requisite, cannot, of itself, be considered improper. 9. We have noted supra that the finding against the assessment has not been contested on merit in the appeal of Revenue. The imports were effected over a period of time and the assessing authority had, as seen from the records, steadfastly refused to be held accountable for the revision in the assessable value. The importer was afforded the cause of action, but n .....

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s nil Assessment re-assessment and provisional assessment are actions enumerated in sections 17 and 18 of Customs Act, 1962 and is the crystalisation of duty liability under these provisions. Imported goods are allowed to be cleared for home consumption on payment of duty as assessed. Likewise, export goods are allowed to be cleared for loading on payment of duty as assessed. From this it can be surmised that assessment is the stage immediately preceding removal from custody under the Customs Ac .....

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ed in valuation matters. When the Customs authorities do not accept the declared value and re-determine the Customs value, the importer or his representative I required to be given a written notice normally and even a personal hearing. An adjudication order giving in detail the basis of determination of value can be obtained if the importer is aggrieved with re-determination of value. Under the Customs Act, 1962, an importer can appeal against a decision on valuation to the Commissioner (Appeals .....

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e purposes of section 128 of Customs Act, 1962, however, assessment and adjudication , though different, are orders or decisions. There is no contest to the findings on assessment recorded by the appellate authority. There is also submission to the effect that the appellate authority was barred by limitation to take up the issue for resolution. Accordingly, the scrutiny of the assessment by the first appellate authority is upheld on jurisdictional grounds as well as on merit. The cavil of Revenu .....

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e bill of entry would settle the dispute in all the bills of entry. With such a resolution in favour of the importer, claim for refund is merely required to satisfy the prescription in section 27 of Customs Act, 1962. 12. The other issue for determination is whether the first appellate authority was correct in restoring the refund claim to the jurisdictional competence of the original authority. While making allowances for the wariness displayed, without any substantiation, by the original autho .....

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disallowing of claims that are not to the satisfaction of the authority. It is settled law that claim may be rejected and, concomitantly, settled law insists that detriment cannot be visited upon a tax-payer without prior notice. No such notice was issued by the Assistant Commissioner of Customs ever. Though we observe that he has recorded waiver of right to notice by the claimant, the circumstances of this waiver are not recorded and it is reasonable to deduce that the claimant may not, in the .....

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upra, the original authority has merely alienated its jurisdiction without adducing any grounds for doing so. The first appellate authority has pointed out the provisions of the Customs Instruction Manual to hold this alienation to be unsustainable. Undoubtedly, the decision of the Hon ble Supreme Court in Collector of Central Excise, Kanpur v. Flock (India) Pvt Ltd [2000 (120) ELT 285 (SC)] had been rendered by then; it was, however, in the context of a refund under the Central Excise Act, 1944 .....

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ector (Appeals) is also provided in section 35. The hierarchy of authorities for adjudication and determination of a matter relevant for charging the excise duty is for a purpose. It is not an empty formality. Classification of the goods manufactured by an assessee is important for the purpose of levy and collection of excise duty. Under Rule 173B every assessee is required to file with the proper officer a list of goods manufactured by him for approval and the proper officer shall after such in .....

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stice based on hierarchy of authorities. 10. Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority h .....

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also gain support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that where as a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer, may refund, the amount to such person without his having to make any claim in that behalf. The provision indicates the importance attached to an order of the appellate or revisional authority under the Act therefore, an order which is appealable under the Act is no .....

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rrived at the conclusion supra. That the provisions of section 27 of Customs Act, 1962 and section 11B of Central Excise Act, 1944 are not pari materia has been the consistent claim in disputes relating to refund of import duties. The Tribunal, in its wisdom, had decided that such a pre-requisite be equally applicable to refunds claimed under section 27 of Customs Act, 1962. Notwithstanding the pendency of those disputes before the Hon ble Supreme Court, the alienation by the original authority .....

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