Budget 2024 Updates

FM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsCGST - Finance Bill proposes to amend Sec 9 to take ENA out of purview of GST + inserts Sec 11A to regularise non-levy of tax on general practice in tradeCGST - Sub-sections to be inserted in Act to relax time-limit to avail ITC u/s 16(4) + New Sec 74A proposed to provide for common time limit for demand notices in fraud casesCGST - Proviso to be inserted in Sec 30(2) to provide for enabling conditions for revocation of registration + Amendment in Sec 39 to mandate return filing by TDS deductors even if there is no deduction in a particular monthIGST - Amendment proposed to prohibit refund of unutilised ITC on zero-rated supplyCustoms - Finance Bill proposes to amend Sec 28DA for acceptance of different types of proof of origin under FTAsFM hikes standard deduction to Rs 75K for new ITR regime + revises tax rates for all income slabs + Rs 7000 Cr revenue foregoneBudget withdraws 2% equalisation levyFM reduces corporate tax rate for foreign companies to 35%FM proposes vivad se vishwas scheme + hikes monetary limits for filing appealsFM proposes 20% capital gains tax on short-term assets + listed financial assets held for more than one year to be classified as long-termGovt scraps TDS on Mutual Funds + decriminalises delay in depositing TDS + rationalisation of compounding of offences + revamps reassessment periodBudget proposes comprehensive review of I-T Act, 1961 + simplifies provisions for charities and TDSFM reduces customs duty on gold and silver to 6% + Nil BCD on nickel cathodeBudget proposes to reduce BCD on mobile phone and chargers to 15% + exempts 25 minerals from customs dutyFM exempts cancer medicines from Customs duty + amends BCD for various machinesFM proposes Rs 48 lakh expenditure outlay; 4.9% fiscal deficitFM announces Rs 1 lakh crore fund for developing space economyPromotion of Tourism - Vishnupad temple and Bodh Gaya temple corridors to be supportedFM announces over Rs 11 lakh crore capital expenditure in current fiscalGovt to invest in small Nuclear energy plants in partnership with private playersCentre to ask States to lower stamp duty for women purchasers of housesIBC - More Benches of NCLT to be set up to speed up recoveryFM spikes limit of Mudra loan to Rs 20 lakhsBudget offers financial aid to labour-intensive MSMEs in manufacturing sectorGovt announces 3 crore additional houses under PM SchemeGovt to secure Rs 15K loan for AP from multilateral agenciesGovt to frame new policy for all-round development of Bihar, Jharkhand and OdishaGovt to give one-month salary to all new recruits in formal sector through EPFOGovt to promote vegetable clusters closer to urban settlementsGovt to focus on productivity of agriculture with climate-resilient seedsFM allocates Rs 2 lakh outlay for PM's five schemes for job creation and farmersFM Nirmala Sitharaman presents 7th Union Budget in ParliamentBudget 2024: FM arrives at Parliament; Speech to begin at 11AMEconomic Survey 2023-24 - from GST PerspectiveUkrainian FM goes on tour to ChinaI-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITATSurvey acknowledges productivity loss due to mental health disordersI-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITATExpenditure on social services up from 6.7% to 7.8% of GDP: SurveyI-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITATTrade deficit contracts to USD 78 bn from USD 126 bn in 2023I-T-Re-assessment is invalidated when there is no failure on part of assessee to make full and true disclosure of facts necessary for assessment: ITATCorporate profitability has peaked to 15-yr-old high between 2020-2023: SurveyI-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITATBudget 2024: More relief for senior citizens & individual taxpayers on card; tweaking of capital gains tax likely; steady capital expenditure to stayI-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITATGoogle backpedals on plan to scrap cookies from ChromeCus - For a HNWI individual, an expensive watch of 'Rolex' make would be his personal effect but same may not be the case if the person is of mere means - Pendant studded with diamonds not liable for confiscation: HCGovt amends Recruitment Rules for Debts Recovery TribunalGST - Even if no date, time or place of hearing is indicated in the notice issued, it was the duty of assessee to file his reply to SCN, which was admittedly received - Plea regarding violation of principles of natural justice cannot be countenanced: HCAbhinav Bindra conferred with Olympic OrderGST - Mismatch between value of e-way bills generated on portal and returns filed in Form GSTR-3B - Petitioner did not provide a comprehensive explanation - To remit sum of Rs.3.50 crores within six weeks - Matter remanded: HCHackers mercilessly hack Bangladesh PM’s website along with police portalsGST - Rule 30 of Rules, 2017 - Assessing officer ought to have issued summons and obtained clarification rather than estimating the outward supply value at 110% of purchase value - Order set aside and matter remanded subject to remit of 10% disputed tax demand: HCUS law-makers call for resignation of Secret Service chief in Trump assassination caseGST - Net ITC shown incorrectly - An inadvertent error was committed and such error was rectified, albeit irregularly, however, sum recovered from petitioner's bank account - Order set aside and matter remanded: HCKarnataka IT Industries piling pressure on govt to extend working hoursGST - Since notification is declared unconstitutional, Amount of IGST paid pursuant to Entry No. 10 of Notification No. 10 of 2017 is to be refunded along with statutory interest: HCStudy says earth’s water depleting fastFDI inflows slide to USD 26.5 bn in 2024 from USD 42 bn in 2023: Economic Survey
 
Recovery of Erroneously Sanctioned Refund

JUNE 17, 2024

By S K Rahman, IRS, working as AR at Delhi CESTAT

(Part 2 of Series of Two Articles)

THE CESTAT has passed Final Order No. 55859-55891/2024 dated 04.06.2024 - 2024-TIOL-528-CESTAT-DEL in the cases of Vishal Video & Appliances Pvt. Ltd. on the issue of recovery of erroneously sanctioned refund of Rs 4.55 Cr and also rejection of application for re assessment of Bills of Entry for refund purposes on limitation of time.

2. The Order covers

(a) Vishal Video & Appliances Pvt. Ltd Vs Commissioner of Customs, ACC (Import), New Custom House, New Delhi in Customs Appeal No. 50091 of 2022 and Customs Appeal No 50286 of 2022 on the issue of recovery of erroneously sanctioned refund of Rs 2.37 Cr +Rs 2.18Cr =Rs 4.55 Cr arising out of Order-in-Original No. 03-04/2021-22 dated 24.05.2021 passed by Principal Commissioner of Customs, ACC (Imports), New Custom House, New Delhi. This aspect has been discussed last week.

(b) Vishal Video & Appliances Pvt. Ltd Vs Commissioner of Customs,ACC (Import), New Custom House, New Delhi in Customs Appeal Nos. 50510 of 2021 to 50540 of 2021 (31 appeals) on the issue of application for re assessment of Bills of Entry for refund purposes on limitation of time arising out of Order-in-Appeal No. CC(A)/Customs/D-I/Import/NCH/808-838/2020- 21 dated 17.12.2020 passed by Commissioner of Customs (Appeals), New Delhi. The details are being presented this week

3 In the Part 1 of the series of two articles, the first set of appeals dealing with recovery of erroneously sanctioned refund was discussed. In the Part 2 of the series of two articles, the second set of appeals dealing with application for re assessment is proposed to be discussed as below :

4 Just to refresh, the brief facts of the case are as follows :

5 The Appellant has imported mobile phones by paying Additional Duty of Customs at the rate of 6% / 12.5% during the period 17-10-2014 to 17-07-2015 (31 bills). After the Hon'ble Supreme Court judgement in the matter of SRF Ltd, - 2015-TIOL-74-SC-CUS, dated 26.03.2015, the Appellant importer has claimed benefit of serial No.263A for paying Additional Duty of Customs at the rate of 1% which was available to the manufacturers on fulfilment of condition of non availment of CENVAT credit on Inputs and Capital goods

6 For these 31 Bills of entry the appellant has claimed refund of differential additional duty of customs paid by Rs 2.37 Cr +Rs 2.18Cr =Rs 4.55. The amount was initially rejected vide order dated 30-06-2016. But as per the judgement dt 05-09-2016 of Hon'ble High Court of Delhi the refund was sanctioned vide Order dt 27-09-2016. Then the Commissioner ACC Import, New Delhi issued show cause notice Vlll(1)20/Ref/1399-D/2015 dated 26.09.2018 for recovery of erroneously sanctioned refund of Rs 4.55 crores. The Principal Commissioner has passed OIO dt 24-05-2021 confirming the demand of Rs. 4.55Cr The same has been upheld by Hon'ble CESTAT Final Order No. 55859-55891/2024 dated 04.06.2024 - 2024-TIOL-528-CESTAT-DEL

7 To re capitulate, the chronology of events is as follows :

8 Appeal Nos C/50510/21 to C/50540/21 (31 appeals):- As can be seen in the Chronology chart above, after delivery of Hon'ble Supreme Court judgement in the case of ITC Limited vs. Commissioner of Customs, Kolkata, 2019-TIOL-418-SC-CUS-LB, Appellant filed appeals on 17-12-2019 with Commissioner(Appeal) with a prayer for re-assessment of the assessment of same 31 Bs/E along with application under section 14 of the Limitation Act, 1963 seeking exclusion of time in computation of limitation period.

9 The Commissioner (Appeals) passed OiA dated 17-12-2020 rejecting the 31 appeals filed by the appellant on the ground of time limitation. Appellants filed appeal before Hon'ble CESTAT against the OiA dated 17-12-2020. The present Appeal Nos Appeal Nos C/50510/21 TO C/50540/21 (31 appeals), are against such rejection for re assessment.

10 In these two appeals, the contentions of the appellant are as follows :

11 Appeal Nos C/50091/2022 and C/50286/2022 INSTEAD OF REVIEW OF REFUND SANCTION ORDER, SCN WAS ISSUED:- The Learned counsel for the appellant submitted that SCN is bad as the refund sanctioning order dt. 28-09-2016 has not been challenged and have already attained finality. Consequently the impugned order is also bad in law.

12 The Authorised Representative for the Revenue, has submitted that it is not necessary to contest refund order as already SLP filed. There was no ground to review the Refund Sanction Order. Thus the Department had two choices (a) to issue SCN under Section 28 for recovery of wrongly sanctioned amount SCN or (b) to Review the Refund Sanction Order and file appeal. The Department chose the option (a). The same has been upheld by Hon'ble CESTAT in this Order

13 The Hon'ble CESTAT in para 52 of the Order states that "It also needs to be noticed that while both the importer and the Revenue can appeal to the Commissioner (Appeals) under section 128 of the Customs Act against an order of assessment or self assessment of a Bill of Entry, the proper officer has another option of issuing a show cause notice under section 28 of the Customs Act to demand and recover duties erroneously refunded." This has been stated in the judgements of Collector of Central Excise, Kanpur vs. Flock (India) Pvt. Ltd. 2002-TIOL-208-SC-CX M/s Priya Blue Industries Ltd. Vs. Commissioner - 2004-TIOL-78-SC-CUS, and in Hon'ble Supreme Court judgement in the case of ITC Limited vs. Commissioner of Customs,Kolkata, 2019 2019-TIOL-418-SC-CUS-LB. It was also held by same Division Bench of the Tribunal in M/s. Vivo Mobile India Pvt. Ltd. vs. Principal Commissioner of Customs 2024-TIOL-149-CESTAT-DEL that an assessment can be modified by resorting to section 28 or on an appeal.

14 The Hon'ble CESTAT in para 55 of the Order states that "The appellant is, therefore, not justified in asserting that the notice under section 28 of the Customs Act could not have been issued to the appellant claiming 'erroneously granted refund' as the only remedy available to the department was to challenge the refund order by filing an appeal before the Commissioner (Appeals).". Thus the submissions of the Learned counsel for the appellant that the refund sanctioning order dt. 28-09-2016 has not been challenged and it has already attained finality are set aside by Hon'ble CESTAT in this Order

15 TIME BAR :- The Authorised Representative for the Revenue has submitted that Any application for reassessment can be done (a) if before out of charge, then under section 17(5) or (b) if already out of charged, then under section 128(1) to file an appeal with Commissioner (Appeal) for reassessment of the assessment done on bill of entry but within 60 days from the date of communication of assessment order to the appellant [can be extended by Commissioner(Appeal) for 30 more days if application for such action is filed within a period of 60 days]. In the instant case the bills of entry were self-assessed by the importer and filed during the period from 07-10-2014 to 17-07-2015. They were given out of charge during the period from 09.10.2014 to 17-07-2015.The application for reassessment with Commissioners (Appeals) should have been filed within 60 days from 09.10.2014 to 17-07-2015. But the appellant has filed application for reassessment with Commissioner (Appeals) during the period on 17.12.2019. Thus the appeals are filed with a delay of 04 years 05 months.

16 APPELANT's PLEA UNDER LIMITATION ACT 1963 :- After receipt of judgment of the Supreme Court in in the case of ITC Limited vs. Commissioner of Customs, Kolkata, 2019-TIOL-418-SC-CUS-LB, the appellant filed 31 appeals before the Commissioner (Appeals) on 17.12.2019 under section 128(1) of the Customs Act together with an application under section 14 of the Limitation Act for exclusion of time for re-assessment of the 31 Bills of Entry. The Hon'ble CESTAT in this case heard at length and was deliberating whether the appellant is entitled to seek exclusion of time under section 14 of the Limitation Act 1963 or not as the Commissioner Appeal in his Order in Appeal has rejected the appeals on the ground of time limitation.

17 The Authorised Representative for the Revenue has submitted the following time lines

Period Event
09.10.2014 to 17-07-2015.
date of out of charge of Bs/E same as the date of communication of assessment order to the appellant date of out of charge of BE 17-07-2015
25-09-2015
Refund applications are filed
Duration From 18-07-2015 to 25-09-2015
2 months 8 days
18-09-2019
Hon'ble Supreme Court judgement in the case of ITC Limited vs. Commissioner of Customs, Kolkata, 2019 2019-TIOL-418-SC-CUS-LB.
17-12-2019
actual date of filing application for reassessment with Commissioner (Appeals)
Duration from 18-09-2019 to 17-12-2019
Almost 3 months
Total duration More than 5 months

This time gap of five months is much larger than the of 60 days (extendable by another 30 days) prescribed in Section 128(1) of Customs Act 1962

18 The Hon'ble CESTAT in para 55 of the Order states that "The total time taken by the appellant from 18.07.2015 upto 25.09.2015 and then from 18.09.2019 to 17.12.2019 is much more than the maximum period of the 90 days contemplated under section 128 of the Customs Act"…... "Thus, even though the benefit of section 14 of the Limitation Act for exclusion of time period from 25.09.2015 upto 18.09.2019 would be available to the appellant, but still the 31 appeals would have to be dismissed as having been filed beyond the time period contemplated under section 128(1) of the Customs Act".

19 Thus the application under section 14 of the Limitation Act for exclusion of time for re-assessment of the 31 Bills of Entry is of no use to them.

20 APPLICATION FOR RE ASSESSMENT: In any refund, particularly refunds arising out of Hon'ble Supreme Court judgement in the matter of SRF Ltd, - 2015-TIOL-74-SC-CUS, the aspects to be verified are whether the Bills of entry are reassessed before filing refund, and whether un just enrichment is applicable. In the instant case, the party claimed the refund and the refund amount was initially rejected vide order dated 30-06-2016. But as per the judgement dt 05-09-2016 of Hon'ble High Court of Delhi the refund was sanctioned vide Order dt 27-09-2016. After the ITC judgement, the appellant felt the necessity of having the reassessment done and filed an application for reassessment of Bills of Entry which were self assessed by them. This has been done even though refund claim was sanctioned. The appellant instead of answering the SCN dt 26.09.2018, they are preferred to file appeal dt 17.12.2019 for re assessment. But important omissions were

(a) the application for re assessment should have been filed within 60 days from the date of communication of assessment order to the appellant (date of out of charge) as per section 128(1) of Customs Act 1962 but was filed very late

(b) the re assessment is pre-requisite for sanctioning Refund. But in the present case, the refund was sanctioned first vide order dt 28.09.2016 where as the application for re assessment was filed on 17.12.2019

21 Considering all the above the Hon'ble CESTAT has dismissed the Customs Appeal No's. 50510 of 2021 to 50540 of 2021 and upheld Order-in-Appeal No. CC(A)/Customs/D-I/Import/NCH/808-838/2020-21 dated 17.12.2020 passed by Commissioner of Customs (Appeals), New Delhi

22 The lessons learnt from this Final Order No. 55859-55891/2024 dated 04.06.2024 - 2024-TIOL-528-CESTAT-DEL are:

23 Lesson 4: Against any self assessed Bill of entry, the importer has to file application for assessment under section 128 of Customs Act 1962. Whereas for the Department, there are two options One, either to issue SCN against the assessment and the other to review the assessment and file an appeal.

24 Lesson 5: Any application for reassessment of self assessed Bill of Entry can be filed by Importers, if already out of charged, then under section 128(1) to file an appeal with Commissioner (Appeal) for reassessment of the assessment done on bill of entry but within 60 days from the date of communication of assessment order to the appellant [can be extended by Commissioner(Appeal) for 30 more days.]

(The views expressed are personal and not in official capacity)

(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)

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