TMI Blog1999 (8) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was binding on the Appellate Authority; the order passed by which is impugned in this writ petition. 2.The petitioner has not chosen to file an appeal against the Appellate Authority before CEGAT as according to the petitioner, it would have been futile to file an appeal, since the CEGAT had already taken the view against it in the above-mentioned order, and, therefore, has chosen to file this petition direct. According to the petitioner, the CEGAT has taken an incorrect view regarding the duty on the differential landing charges and has denied the refund on entirely untenable grounds and that view needs correction by this Court. 3.The duty is charged and assessed under Section 14 of the Customs Act, 1962 on the value of the imported goods. Rule 9 (2) as it stood in 1988 was as under:- "9 (2). For the purposes of sub-section (1) and sub-section (1A) of Section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include. (a) the cost of transport of the imported goods to the place of importation; (b) loading, unloading and handling charges ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re lesser than the notional landing charges, then the refund used to be ordered by the Customs Department. The petitioner submits that the petitioner imported various consignments of goods during the part of 1989 and finding that the actual landing charges being substantially lesser than the notional landing charges, the petitioner preferred refund applications before the fourth respondent. However, the applications were rejected by the fourth respondent relying on the judgment of the CEGAT reported in 1988 (38) E.L.T. 517 (Tribunal) (Collector of Customs v. India Polyfibres Ltd.). The petitioner filed nine appeals against the order of the fourth respondent. However, those appeals have been dismissed by the Collector of Customs and Central Excise (Appeals), the third respondent herein, necessitating the filing of the present petition. 4.The learned Counsel Mr. Krishna Srinivasan, appearing on behalf of the petitioner, pointed out that Rule 9(2) which was added in 1988 had there-after undergone a change in the year 1990, which had the effect of providing loading, unloading and handling charges, as provided in clause (b) of the aforementioned rule which would be 1% of the free on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if in the process of assessment, some more duty was charged on the basis of notional landing charges which were far too higher than the actual landing charges, then such difference had to be worked out and refunded to the importer. The learned Counsel points out that this is a taxing statute and, therefore, had to be strictly construed. The learned Counsel points out that the third respondent had rightly felt and bound by the order of the CEGAT, but the order of the CEGAT itself was a wholly incorrect order which required the correction. 5.As against this, Mr. Sethuraman, learned Counsel appearing for the respondents, pointed out that this writ petition was not maintainable as the petitioner had chosen to bye-pass the Appellate Authority remedy as provided in the Act. The learned Counsel urged that the Court could not entertain this Petition as the alternative statutory remedy was not exhausted. He further argued that since the order of the Tribunal was binding on the third respondent and since the third respondent has rightly followed the order, this Court could not correct that order by a writ of certiorari. In short, his contention is that, while correcting the impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case, it would be in the interests of both sides to have the matter finally decided by this Court at the present stage itself especially since we have had the benefit of elaborate and learned arguments addressed by the counsel appearing on both sides." The learned Counsel for the petitioner very heavily relies on the observation and points out that in the present case, filing of an appeal before the Tribunal would have been of no consequence as the Tribunal itself was bound by its own view. The learned Counsel additionally points out that now the matter is pending right since 1991, since this Court had entertained the matter and issued a rule nisi in the year 1991 itself. In view of the long pendency also, the learned Counsel suggests that to throw the petition, on the ground of alternative remedy after a period of almost eight years would be denial of justice to the petitioner. In addition to that, the learned Counsel for the petitioner submits that the controversy involved is likely to affect number of importers whose claims for refund have been pending since 1991. It is true that there is an appeal provided and as such there is an alternative remedy. However, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be accepted, lakhs of assessments all over the country would have to be made on provisional basis. The statutory provisional assessment procedure itself involves complicated formalities, including execution of a bond and giving of bank guarantee/security etc. After the actuals become available, such lakhs of assessments would have to be re-opened, resulting in refunds or recoveries. Rare cases apart, the amounts involved in each individual case would be very small. This is so because the landing charges themselves form only a fraction of the import price and the difference between the average amount and the actual amount would further be a fraction of that fraction." The Tribunal thereafter has relied on the Division Bench judgment of the Gujarat High Court in M/s. Prabhat Cotton and Silk Mills Ltd. v. Union of India [1982 E.L.T. 203 (Guj.)] and has proceeded to mention as under: "The considerations which had weighed with the Hon'ble High Court, inter alia, were enormous number of cases on the one hand (running into hundreds of thousands) and pettiness of the amounts involved in individual cases on the other." The Tribunal thereafter went on to observe that while the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was also a practice to refund the excess duty on account of the payment of lesser actual landing charges, as compared to the higher notional charges taken into consideration for arriving at the duty. In relying upon the practice to assess the duty on the basis of the notional landing charges, the Tribunal should also have been mindful of the further practice of refunding the excess duty claimed and paid by the importer. The petitioner in the clearest possible terms has asserted upon such a practice in paragraph 6 of the affidavit. Following is the pleading: "The practice hitherto was that on completion of the clearance formalities the importers file refund applications before the Customs Department for refund of the difference of Customs duty paid on the notional basis and the actual basis. These refund applications were entertained by the Customs Department if otherwise found in order and the difference of duty was being refunded without demur." The Counter, which is filed on behalf of the respondents, is wholly silent on this assertion. The contentions raised in paragraph 6 of the affidavit have been dealt with in paragraph 4 of the Counter, where the practice pleaded by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een, the department would be entitled to add 1% of the value of imported goods as loading, unloading and handling charges (landing charges). In this Petition, this Court is not called upon to decide upon the validity of the newly added proviso to Rule 9 (2) and indeed the learned Counsel has not addressed the Court on the question of constitutionality or the validity of unamended Rule 9 (2) or the later amendments thereto. However, even the question of the validity of creating of the notion of 1% in place of actuals is pending before the Apex Court. However, that is not the subject in this writ petition. The subsequent amendments have been pointed out only to highlight the facts that while the notional landing charges were treated to be final charges by creating a fiction, such fiction was not available in the unamended Rule 9 (2) which alone was available and applicable to the transactions in question for which the refund was being claimed by the petitioner. Reading of the unamended Rule 9 (2) as introduced in 1988, therefore, would leave no manner of doubt that there was no scope for finalising the assessment on the basis of notional loading, unloading and handling charges alone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, then, such an entitlement cannot be sacrificed on the complacent plea of increased work load and tiny nature of the claim. It would have to be held, therefore, that when the applications were made, the petitioner herein was entitled to have the refunds claimed. The order to that extent, will have to be set aside. However, further amendments cannot be granted in view of the amended provision of Section 27 of the Customs Act. Section 27 of the Customs Act now is retrospective in operation and unless it is shown that the liability has not been passed on to some one else, the petitoner would not be entitled to the refunds. For this purpose alone, the matter would have to be remanded to the third respondent. He would grant opportunity to the petitioner afresh to show that the petitioner is still entitled to the said refunds. The petitioner may, if he so chooses, appear before the concerned authority and justify the claims of refund if necessarily by putting fresh materials and plea before the said authority. The petition succeeds to this extent alone. 9.In the result, the impugned order is set aside, and the concerned authority is directed to re-hear the petitioner and decide th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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