TMI Blog2017 (7) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is not done correctly, he is now empowered to re-assess the duty leviable on such goods. In case, the re-assessment, as carried out by the Proper Officer, whether with regard to valuation of goods, or classification, or examination, or concession of duty availed of, consequent to any notification, is different to what had been done via self-assessment procedure and the same is not accepted by the importer or the exporter, he is required to pass a speaking order within fifteen (15) days of such determination - The new regime, therefore, envisages a situation where self-assessment constitutes an order, if regard is had to the amended provisions of Section 17 read with Section 2(2) of the Act, which, includes within the definition of the term assessment, self-assessment. In view of the definitive stand taken in the counter affidavit by the respondents in the present case, that once, a protest was lodged, it was incumbent upon the Department to pass a speaking order, nothing further need to be said on this aspect. However, in the instant appeal, I must also deal with the stand taken by the respondents that no protest was lodged with it, as per the protest record maintained by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the following relevant facts are required to be noticed : 2.1. The petitioner is in the business of importing and selling electronic products, which includes mobile phones (its parts and accessories), tablets and television sets, etc., It appears, as a part of its business activities, over a period of time, the petitioner had imported mobile phones, qua which Bills of Entires (in short 'BEs') were filed. 2.2. The petitioner claims that at the relevant point in time, i.e., at the time of clearance of the said goods, it was not granted the benefit of concessional rate of duty. The petitioner, evidently, had been paying duty at the rate of 13.5% [comprising of 0% Basic Customs Duty (BCD), 13.5% Countervailing Duty (CVD) {including 1% National Calamity Contingent Duty(NCCD)}, 0% Education Cess, 0% Higher Secondary Education Cess and 0% Special Additional Duty(SAD)]. 2.3. The petitioner, evidently, took the stand that, since, CVD imposed upon it, emanates from the provisions of Section 3(1) of the Customs Tariff Act, 1975, which provides that CVD shall be equal to the excise duty for the time being leviable on a like article produced or manufactured in India, it was e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NCCD), albeit, with effect from 01.03.2015. 2.9. According to the petitioner, this position changed after the Supreme Court rendered its judgement in the matter of : SRF Industries Vs. Commissioner of Customs, Chennai, 2015 (318) ELT 607 (SC). Via the said judgement, in effect, the Supreme Court ruled that SRF Industries, which was an importer of goods, was entitled to the benefit of the said exemption notification, which contained condition No.20, which was similar to condition No.16 obtaining in Notification No.12/2012-CE. The rationale being, as it appears, that since, the manufacturer of imported goods is situate outside India, and therefore, would not be entitiled to take credit under the CENVAT Credit Rules, 2002, it shall be presumed that the condition for non-availment of concessional rate of duty, which was, the non-availment of CENVAT Credit, stood satisfied. 3. Based on the aforesaid position in law, on 14.09.2015, the petitioner lodged four (4) refund claims in respect of imports made between April and July 2015. These refund claims pertained to 233 BEs. The details, with regard to the refund claims, are, for the sake of convenience, set out hereinbelow : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as that since, the words in pursuance of an order of assessment ... had been deleted, after the amendment in 2011, there was no requirement to lay challenge to the assessment order, if, it could be called an ''order'' as understood in law. (ii) According to the learned counsel for the petitioner, the petitioner was, thus, entitled to register a claim for refund of duty under the amended Section 27 of the Act, once, it was shown that duty had been paid by it or, borne by it. (iii) Since, there is no dispute with regard to this aspect of the matter, the applications for refund could not have been returned on the ground that they were premature. 6.2. There was no provision in the Act, for passing an order of the kind, which had been passed by the second respondent, which is, to, simply, return the applications. The second respondent was required to either allow or reject the applications for refund. The impugned order was, thus, not sustainable in law. 6.3. Despite making a specific demand that a personal hearing be granted to the petitioner in terms of the provision made, in that behalf, in the refund application, the impugned order was passed without af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. Thus, the submission of the learned counsel was that the assessee had no right to invoke the provisions of Section 17 of the Act. 6.6. Based on the aforesaid contentions, learned counsel submitted that since, Section 27 of the Act had been amended to reflect the changes brought about in the mode and manner of assessment (as provided under Section 17 of the Act), the assessee could claim refund immediately, after the duty had been either paid or borne by him. 6.7. It was, thus, contended that there was no requirement in law, to first challenge the assessment order, if, it can be called one, and to claim a refund, only, if, it was reviewed or modified in appeal. 6.8. In support of his submissions, learned counsel for the petitioner relied upon the following judgments and/or orders : (i) Aman Medical Products Ltd. V. Commissioner of Customs, Delhi, 2010 (250) ELT 30 ; (ii) Suryalaxmi Cotton Mills V. Commissioner of Central Excise, Nagpur, 2014-TIOL-3015-CESTAT-MUM; (iii)Central Office Mewar Palace Org. V. Union of India, 2008 (12) STR 545 (Raj.); (iv)Commissioner of Central Excise, Goa V. Sesa Goa Ltd., 2014 (299) ELT 221 (Tri.-Mumbai); (v) Cipla Ltd., V. Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : M.F. (D.R.) Notification No.34/95-Cus.(NT), dated 26.05.1995. Based on the aforesaid, learned counsel says that the second respondent was entitled to return the refund applications, as they were deficient and incomplete. 7.2. It was further contended by the learned counsel that in order to claim refund, the petitioner had to establish that the duty paid by it was in excess of that, which was payable in law, and that, this fact would only be set at rest, after the BE was re-assessed. Since, there was no re-assessment, qua which, the second respondent did not have the necessary jurisdiction, the refund applications had been rightly returned, as being premature, via the impugned order. 7.3. Furthermore, learned counsel submitted that, if, as contended by the petitioner, that the BEs were assessed, without its consent, and that, duty was paid under protest, it could have asked for issuance of a speaking order under Section 17(5) of the Act. In support of this contention, learned counsel submitted that the petitioner had self-assessed the rate of CVD and this rate having been accepted by the proper Officer, there was, in fact, no lis obtaining between the petitioner and the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond respondent vide the impugned order, i.e., order dated 23.11.2015, returned the refund applications on the ground that they were premature. The reason given in the impugned order, in effect, was that the self-assessment order had not been modified or revised, and hence, the refund applications could not have been processed. For this purpose, the second respondent placed reliance on the judgement of the Supreme Court in Priya Blue Industries case. 10. Therefore, given these facts, the issue, which arises for consideration, is, as to whether the claims made by the petitioner between April 2015 and July 2015 were tenable. In other words, was the petitioner entitled in law, to straight away seek refund of duty without having the assessment order modified or revised ? 10.1. In this behalf, it would be relevant to not only examine the scheme of the Act both prior to and post the amendments, but also the stand taken by the respondents, both in their counter affidavit and generally in other matters, which raise a similar issue. 11. A comparative analysis of the provisions of Sections 17 and 27 of the Act, as they stood both before and after the amendment, would reveal the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment in which the duty assessed is nil. 12.3. Furthermore, in so far as Section 17 of the Act was concerned, the scheme of assessment of duty was changed from a system of examination and testing by the Proper Officer to self-assessment of duty. This change was brought about in sub-section (1) of Section 17, whereby, the importer or the exporter, could enter goods under Sections 46 or 50 of the Act, as the case may be, by self-assessing the duty leviable on goods sought to be cleared. 12.4. Under sub-section (2) of Section 17, the Proper Officer was given the option of verifying the self-assessment made qua the goods sought to be cleared, and, if, such an option was exercised by the proper Officer, he could examine and/or test the goods, or any part thereof, as was found necessary. 12.5. Like in the unamended section, where verification was carried out, the Proper Officer under sub-section (3) of Section 17 was given the power to require the importer or the exporter, or any other person, to produce documents and/or information referred to therein. 12.6. Similarly, under sub-section (4) of Section 17, after the verification, examination or testing of goods, if, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to pass a speaking order within fifteen (15) days of such determination. 13.3. The new regime, therefore, envisages a situation where self-assessment constitutes an order, if regard is had to the amended provisions of Section 17 read with Section 2(2) of the Act, which, includes within the definition of the term assessment, self-assessment. 14. Having said so, the difficulty, which arises and one which cannot be overlooked, is that, BE or the Shipping Bill, as the case may be, is required to be uploaded in an electronic form, unless special permission is given by the concerned authority to file the said documents in a physical form. Therefore, where an importer or an exporter is of the view that he is entitled to be assessed at a lower rate of duty (which would include a 'nil' rate of duty), as against that rate demanded by the customs authority, there is no facility available to lodge a protest. 14.1. The only methodology, therefore, which is available to the importer or the exporter, at the moment, as it appears, is to record their protest in writing letters with the concerned authorities. 14.2. In this particular case, as is evident from the narration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot a speaking order in terms of Section 17(5) of the Act. ..... 17.5. This position is contrary to the stand, as indicated above, taken by the customs authorities in Ingrams Micro India Private Limited case (cited supra), wherein, the direction sought by the petitioner in that case, to seek issuance of speaking order, was resisted on the ground that unless the Proper Officer on his own choses to verify the goods subjected to self-assessment by the importer or exporter, in exercise of powers under Section 17(2) of the amended Act, no direction could be issued for passing a speaking order. 17.6. I had found the stance taken by the respondents unsustainable in Ingrams Micro India Private Limited case (cited supra), for the reason, that once, a protest is lodged, the Proper Officer is made aware of the fact that the clearance of goods at the rate of duty demanded by the customs authorities is being done with a caveat, and therefore, he is bound to verify, examine and test the goods, and pass a speaking order. 18. I have also held that unless a speaking order is passed, the aggrieved party , i.e., the importer or exporter, cannot lodge a viable appeal with the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer to pass a speaking order under Section 17(5) of the Act, on merits, for whatever it was worth, as to why the petitioner was not entitled to the benefit of concessional rate of CVD. 18.6. The facts in the instant case show that the respondents chose to deal with the protest lodged by the petitioner, by taking a more convenient route, which is, to return the applications lodged for seeking refund. 19. The question, therefore, which, arises for consideration is whether the petitioner, so to say, added a second string to its bow, by lodging applications straightaway and seeking a refund. 19.1. According to the petitioner, since Section 27 of the Act stands amended, upon payment of duty, it can, immediately, file for refund. This argument is based on the language of the amended provision (i.e., Section 27 of the Act), whereby, the words in pursuance of an order of assessment, which follow the words paid by him have been deleted. The contention advanced on behalf of the petitioner is that once, self-assessment is made under the amended provisions of Section 17, which is not subjected to verification by the proper Officer, the importer or exporter is entitled to, immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against by the party seeking to claim refund. 19.6. Pertinently, in Micromax Informatics Limited-I case, the Division Bench noticed the reasoning of the Court in Aman Medical Products Limited case, and also the amendments made in Section 27 of the Act with effect from 08.04.2011. 19.7. Upon noticing the amendment made, the Court made the following observations in paragraphs 12 to 14 of the judgement : 12. An important change that has been made is that a person can now claim refund of any duty or interest as long as such duty or interest was paid or borne by such person. The conditionality of such payment having been made pursuant to an order of assessment does not exist. Secondly, once an application is made under Section 27(1) of the Act, it is incumbent on the authority concerned to make an order under Section 27(2) determining if any duty or interest as claimed is refundable to the applicant. The proviso to Section 27(2) of the Act sets out the instances where refund should be paid to the claimant instead of being credited to the Consumer Welfare Fund. The only relevance as far as payment of duty under protest is concerned is indicated in the second proviso to sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under sub-section (2) of Section 27 of the Act, to determine whether whole or part of the duty and interest, if any, paid on such duty, by the applicant is refundable. The refund of duty or interest, if any, paid, is to be made to the applicant, if, it fulfills, the conditions set out in Section 27(2) of the Act. In case, conditions are not fulfilled, then, the duty and the interest, if any, paid on the duty, is to be credited to the Consumer Welfare Fund. 20. To be noted, the applicant need not, necessarily, be an importer, he could also be a buyer, who had not passed on the incidence of duty and interest, if paid, on such duty, to any other person [See Clause (c) of proviso to Section 27(2) of the Act)]. 21. Therefore, having regard to the aforesaid discussion, it is clear that the petitioner, in fact, has a second string to its bow, and thus, the concerned authority was required to pass an order on the refund applications, even if, it is assumed, for the moment, that no protests were lodged or the protest lodged did not accord with the provisions of Circular No.5/2008. 22. I may also indicate herein that the petitioner, in support of its aforesaid submission, has reli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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