Exported goods re-imported under Notification No 94/96 Cus - Refund of SAD is not admissible as assessment was not challenged - High Court reverses order of Tribunal
By TIOL News Service
CHENNAI, MAY 14, 2015: THIS case is perhaps a lesson for all assessees not to take revenue appeals lightly. In this revenue appeal involving a refund of Rs 66,528/-, the respondent assessee was not present and not represented. Had they engaged any counsel, he would have raised a preliminary objection on maintainability of the appeal due to the amount falling below the threshold limit of Rs 10 lakhs. (This limit is applicable to pending cases also as per Karnataka HC order in 2012-TIOL-178-HC-KAR-IT)
Anyway, the details of the case:
The assessee had exported some machinery and they re-imported the same by claiming exemption from import duties under Notification No 94/96 Cus dated 14.12.1996. This Notification did not cover the Additional duty of customs, known as SAD. So, the assessee paid the duty and cleared the goods. Later, they filed a refund claim as SAD was exempted under another Notification No 18/2000 Cus dated 01.03.2000. The Adjudicating Authority rejected the claim on the ground that the assessee is not eligible for refund claim and the same was also confirmed by the Commissioner (Appeals).
However, the Tribunal allowed the appeal by holding that the assessee is entitled for refund. Against this order, revenue is in appeal before the High Court.
Appearing for revenue, the standing counsel argued that the 1st respondent having not challenged the order of assessment, the claim for refund is not maintainable as has been consistently held by the Supreme Court in a catena of decisions, more particularly the decision in Priya Blue Industries case. It is further submitted by the learned standing counsel for the appellant that the importer having not claimed the benefit of Notification No.18/2000 either before the goods were assessed by the proper officer or during assessment and cleared it after payment of duty, cannot, at a belated stage, i.e., at the time of refund proceedings, contend that the 1st respondent is entitled to the benefit of Notification No.18/2000 and, therefore, is eligible for refund.
After hearing the arguments by revenue, the High Court held:
In Karnataka Power Corporation Ltd. case - 2002 142 ELT 482 (SC) relied on by the Tribunal, a formal application for re-assessment of duty was made together with a refund of a part of the duty paid on the ground that the classification has to be correctly done. Therefore, both on the issue of classification and refund was at large. In those circumstances, the point at issue was whether, when a new classification is suggested before the appellate authority, the consequent relief flowing out could be held to be time barred. In that case, it is clear from the order that the appellant had sought for amendment before the Assistant Commissioner of Customs and in that view of the matter, refund was claimed. However, in the case on hand, such is not the case, as the order of assessment has not been challenged and the assessment has reached finality.
The assessment made in the Bill of entry is totally a different claim from the one made in the refund application. It is therefore held that the 1st respondent, having not challenged the order of assessment, cannot at a belated stage, claim refund by pressing into service another Notification and, therefore, the rejection of the refund claim by the Assessing Officer and rightly held by the Commissioner (Appeals) is clearly sustainable. The Tribunal, without discussing the decisions, has, by a cryptic order, allowed the appeal of the 1st respondent following the decision of the Supreme Court in Karnataka Power Corporation Ltd. case, which decision, is clearly distinguishable on facts.
In view of the above, the High Court allowed the appeal filed by revenue.
(See 2015-TIOL-1249-HC-MAD-CUS)
