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TMI Blog2020 (12) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... Mobile under section 27 of the Customs Act 1962 Customs Act for refund of Additional Customs Duty Additional Duty and has directed that Vivo Mobile would be entitled to a refund of Rs. 3,01,49,633/- and Rs. 2,92,96,394/- respectively. It needs to be noted that though the Deputy Commissioner had by said order dated 23 January, 2017 sanctioned the aforesaid refund amount but a direction was given that this amount should be credited to the Consumer Welfare Fund in terms of section 27(2) of the Customs Act. 2. To appreciate the reasons as to why applications have been filed by the Department to add a ground in the Appeals to the effect that the refund claims could not have been entertained unless the Assessment Orders were modified in accordance with law, it would be necessary to state the relevant facts. 3. Vivo Mobile, which is a respondent in both the appeals, was during the relevant period engaged in import and distribution of mobile phones and its accessories in India. It paid the Additional Duty of Customs at the rate of 6% up to February 2015 and thereafter, at the rate of 12.5% under section 3(1) of the Customs Tariff Act 1975 Tariff Act on the 12 bills of entry. However, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 March 2002 that was examined by the Supreme Court in SRF Ltd. It had, however, paid Additional Duty at the rate of 6% up to February 2015 and at the rate of 12.5% thereafter and, therefore, filed applications for refund of the excess Additional Duty of customs that was paid by it. 6. On scrutiny of the documents submitted by Vivo Mobile with the refund claims, it was found by the Department that various documents, including re-assessment of bills of entry in respect of the aforesaid refund amount had not been filed. Accordingly, a deficiency memorandum dated 28 January 2016 was issued to clarify the position. Vivo Mobile responded to the deficiency memo and pointed out that the refund applications filed by it be considered as a request for re-assessment of the bills of entry since "the filing of the refund application ipso facto means and implies that they are seeking re-assessment of all the impugned bills of entry". It was further stated that when the goods were allowed to be cleared, the valuation aspect was examined by the proper officer and the officer competent to decide the refund application has a concurrent jurisdiction. Thus, it was pleaded that the refund claim itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyer, in which event it would be a case of unjust enrichment. The Deputy Commissioner found that though the refund Application had been filed in time, but the claimant had failed to prove that the claim was not hit by unjust enrichment. Accordingly, even though the refund claim was sanctioned, the Deputy Commissioner directed that the amount be credited in the 10. 2016 (335) ELT 446 (Del.) account of the Consumer Welfare Fund in terms of section 27(2) of the Customs Act. 10. Feeling aggrieved, Vivo Mobile filed two appeals before the Commissioner (Appeals) against that part of the orders of the Deputy Commissioner that held that since it was a case of unjust enrichment, the sanctioned amount would not be payable to Vivo Mobile and would be required to be deposited in the Consumer Welfare Fund. The appeals filed by Vivo Mobile were allowed by the Commissioner (Appeals) for the reason that the incidence of Additional Duty had not been passed on to the buyers. The Commissioner (Appeals), therefore, directed that the amount be refunded to Vivo Mobile. The observations are as follows: "5.4 The period for which the impugned refund claim was filed pertains to the period of 15.12.2014 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de." 11. It is against the orders of the Commissioner (Appeals) that the present appeals were filed by the Department on 30 September 2019 in view of the directions issued by the Committee of Commissioners under section 129A(2) of the Customs Act. The Committee of Commissioners had observed that the Commissioner (Appeals) was not justified in placing reliance upon the decision of the Delhi High Court in M/s. YU Televentures Pvt. Ltd. vs. Union of India 2016 (340) ELT 88 (Del.) since in that case the issue involved was whether refund could be granted without re-assessment of the bills of entry, whereas in the present case the issue involved was whether there was unjust enrichment and the issue relating to re-assessment of bills of entry was not involved. The Committee of Commissioners also observed that the Commissioner (Appeals) had not dealt with the reasons given by the Deputy Commissioner relating to unjust enrichment. The grounds taken in the Appeals that were filed on 30 September 2019 are reproduction of the grounds indicated by the Committee of Commissioners for filing the appeal and they are reproduced below: "B. It is also observed that the case of M/s YU Televentures P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and hence no adversarial adjudication, a refund application can be maintained even if appeals are not filed against the assessed bills of entry. The Madras High Court had also similarly opined. The first question that arose for consideration before the Supreme Court was whether a self-assessment, when there is no speaking order, can be termed to be an order of self-assessment. It was urged on behalf of the assesses that there is no application of mind in such a situation and merely an endorsement is made by the authorities concerned on the bills of entry which endorsement cannot be said to be an order, much less a speaking order. This contention of the assesses was not accepted by the Supreme Court and it was held that the endorsement made on the bills of entry would be an order of assessment and that when there is no lis, a speaking order is not required to be passed in "across the counter affair". The Supreme Court then examined the provisions of sections 17 and 27 of the Customs Act, both prior to the amendments made by Finance Act 2011 and after the amendments, and observed that there is no difference even after the amendments as self-assessment is also an assessment. The obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicated within the scope of provisions as to refund. While processing a refund application, re-assessment is not permitted nor conditions of exemption can be adjudicated. Re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. ------------- 47. When we consider the overall effect of the provisions prior to amendment and post amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of section 27 to set aside the order of self assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self assessment, he has to get the order modi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund claim has attended finality as the Department did not file any appeal or cross objection against the order passed by the Deputy Commissioner. 18. The submissions advanced by learned Authorised representative of the Department and the learned Senior Counsel appearing for the Appellant have been considered. 19. In order to appreciate the contention, it is necessary to examine the relevant provisions of the Customs Act and the 1982 Rules. 20. Section 129 of the Customs Act deals with 'Appellate Tribunal' and section 129A deals with 'Appeals to the Appellate Tribunal'. Sub-section (1) of section 129A provides that any person aggrieved by any of the orders enumerated in the sub-section may appeal to the Appellate Tribunal against such order. 21. Sub-sections (4) and (5) of section 129A which deal with cross-objections are reproduced below: "(4) On receipt of notice that an appeal has been preferred under this section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such order or any part thereof, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections verified in such manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal. - The appellant shall not, except by leave of the Tribunal urge or be heard in support of any grounds not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or those taken by leave of the Tribunal under these rules: Provided that the Tribunal shall not rest its decision on any other grounds unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground."" 26. It would be seen that under rule 10 of the 1982 Rules, the appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or those taken by leave of the Tribunal under the Rules. The first part of this rule restricts the power of the appellant to urge any ground not set forth in the memorandum of appeal, while the second part deals with the power of the Tribunal in deciding the appeal even on grounds not set forth in the memorandum of appeal. The proviso, however, stipulates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing for Vivo Mobile is that neither an appeal or cross-objections were filed by the Department before the Commissioner (Appeals) to assail that part of the order of the Deputy Commissioner that sanctioned the refund amount and, therefore, once this part of the order of the Deputy Commissioner had attended finality, it is not open to the Department to raise this issue in this Appeal before the Tribunal, and that too subsequently by moving an application seeking permission to add a ground to the grounds already taken in the memorandum of appeal. 30. The issue, therefore, that arises for consideration is whether the Department could have filed any appeal or cross-objections before the Commissioner (Appeals) against that part of the order of the Deputy Commissioner that sanctioned the refund amount. For this purpose, it would be necessary to examine the provisions of the Customs Act dealing with Appeals before the Commissioner (Appeals). 31. Section 128 of the Customs Act deals with Appeal to Commissioner (Appeals) and is as follows: "SECTION 128. Appeal to Commissioner (Appeals)- (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. (4) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision. (4A) The Commissioner (Appeals) shall, where it is possible to do so, hear and decide every appeal within a period of six months from the date on which it is filed. (5) On the disposal of the appeal, the Commissioner (Appeals) shall communicate the order passed by him to the appellant, the adjudicating authority, the Principal Chief Commissioner of Customs or Chief Commissioner of Customs and the Principal Commissioner of Customs or Commissioner of Customs." 33. A perusal of section 128 of the Customs Act shows that any person aggrieved by any decision or order passed under the Act by an officer of customs lower in rank than a Principal Commissioner or Commissioner may appeal to the Commissioner (Appeals). This section does not provide for filing of cross-objections, unlike sub-section of (4) of section 129A of the Customs Act which, in regard to Appeals to the Appellate Tribunal, provides for filing a memorandum of cross-objections against any part of the order appealed against and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal, or within such further time as the Appellate Court may see fit to allow. Explanation.- A respondent aggrieved by a finding of the Court in the Judgment on which the decree appealed against is based may, under this rule, file cross-objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit the decree, is, wholly or in part, in favour of that respondent. Form of objection and provisions applicable thereto.- (2) Form of objection and provisions applicable thereto- Such cross-objection shall be in the form of a memorandum, and !he provisions of rule 1, so far as they relate to the form and contents of the memorandum of appeal, shall apply thereto. (3) xxxx xxxx xxxx 4) Where, in any case in which any respondent has under this rule filed a memorandum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless be heard and determined after such notice to the other parties as the Court thinks fit. (5) The provisions relating to appeals by indigent persons shall, so far as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivo Mobile in connection with the non-filing of cross-objections by the Department in the appeal filed by Vivo Mobile, therefore, have no relevance in the present case. 40. In Gannon Dunkerley, this Bench of the Tribunal had examined at length the relevant statutory provisions to determine whether an additional ground can be taken up under rule 10 of the 1982 Rules in an Appeal before the Tribunal. Though it is correct, as has been contended by learned Senior Counsel appearing for Vivo Mobile, that the ground that is sought to be added is contrary to a ground already taken in the Appeal since initially a ground was taken in the Appeal that the decision relied upon by the Deputy Commissioner was in connection with re-assessment of bills of entry and not unjust enrichment, but still in view of the decision of the Supreme Court in ITC limited, it is considered appropriate, in the facts and circumstances of the case, to permit the Appellant to raise an additional ground in the two Appeals in view of the principles of law laid down by this Bench in Gannon Dunkerley. The judgment of the Delhi High Court in Micromax Informatics, that was relied upon by the Deputy Commissioner, has been r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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