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Refund consequent to reduction in Customs Duty on imposition of Final Anti Dumping Duty - Refund to be granted without re-assessment or appeal:HC

By TIOL News Service

CHENNAI, FEB 08, 2013: THE petitioner imported Mulberry Silk Fabrics from China under Bill of Entry No.228652, dated 31.5.2006. The goods were assessed as per tariff applicable and provisional anti-dumping duty was also levied on the basis of Notification No.52/2006-Cus, dated 31.5.2006.

Thereafter, in terms of the provisions of the Customs Tariff Act, 1975, the final anti-dumping duty was determined and notification No.121/2006-Cus., dated 26.12.2006 was issued.

In the final notification, the quantum of anti-dumping duty was reduced as against the higher provisional anti-dumping duty collected on the goods cleared.

Based on the final notification, the petitioner made an application for refund of the excess anti-dumping duty on 16.1.2007 and that has been rejected by the impugned letter dated 25.4.2007, which reads as under:

"Please refer to your refund claim against bill of entry No.228652/31.5.2006. Your refund claim was perused and it is found that the ground for the claim is towards non-availment of notification benefit. It is seen from the documents submitted by you that the re-assessment has not been done. An order of assessment given by the competent authority (Group assessing the bill of entry) can not be reviewed or modified by the Refunds Section as held by the Apex Court in the case of M/s. Super Cassette Industries Vs. Commissioner of Customs [2004 (163) ELT A116 (SC)] and M/s. Priya Blue Industries Vs. Commissioner of Customs 2004-TIOL-78-SC-CUS. Refund will arise only if such an order is lawfully modified or revised in your favour.

In view of the above, the refund claim filed by you is not admitted being pre-mature. You are advised to approach the appropriate authority to get the bill of entry re-assessed appropriately or an order from the appellate authority.

You will have an option of filing a fresh claim, along with original documents, after getting the assessment order lawfully modified to your benefit whereupon the refund claims will be examined on merits.

In view of the above, your refund claim is returned herewith being pre-mature."

and this order as above is under challenge before the High Court.

As per 9A(2) of the Customs Tariff Act, 1975, consequent to final determination of anti-dumping duty, refund of excess anti-dumping duty paid shall be made.

In the present case, the application for refund was filed on 16.1.2007, namely within 17 days after the date of final notification issued under Section 9A(2) of the Customs Tariff Act, 1975. The Assistant Commissioner (Refunds), however, takes a different view in the matter and states that the refund claim is pre-mature and the appropriate authority has to re-assess the bill of entry or there should be an order from the Appellate Authority.

The High Court observed,

"The provisions of the Customs Tariff Act, 1975 provide for imposition of provisional anti-dumping duty; and for finalization of provisional anti-dumping duty; and for consequent refund, if there is a reduction in the anti-dumping duty. The benefit, if any, will have to flow automatically. The respondent/department cannot insist on filing an appeal to the Appellate Authority or direct the petitioner/importer to approach the appropriate authority for reassessment of the order. No specific provision has been shown in the impugned proceedings as to how such a procedure is required and on what basis such a direction can be issued. The second respondent has failed to refer to any of the provisions of the Customs Act, 1962 or the Customs Tariff Act, 1975 which requires reassessment of the Bill of Entry or filing of the appeal before even refund is claimed consequent upon finalization of provisional anti-dumping duty. Therefore, the impugned proceedings is contrary to the provisions of the Customs Tariff Act, 1975 and the Customs Act, 1962. A condition not authorized by law cannot be imposed for a claim for refund."

The High Court found that the case law cited by the Assistant Commissioner were not relevant.

The High Court observed,

"In the case on hand, the wrong payment of duty is not sought to be refunded. The payment of provisional anti-dumping duty is subject to the finalization of the anti-dumping duty in terms of Section 9A(2)(b) of the Customs Tariff Act, 1975 and refund becomes automatic after the final notification is issued. There is no necessity for filing an appeal or seeking modification of the order, so as to seek refund."

Writ Petition Allowed and the Department directed to process the petitioner's application for refund forthwith.

(See 2013-TIOL-101-HC-MAD-CUS)


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