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
Refund Arising out of Finalisation of Provisional Assessment

JULY 08, 2024

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

THE CESTAT has passed Final Order No. 55946/2024-dt 28.06.2024 - 2024-TIOL-621-CESTAT-DEL in the case of M/s. Indian Oil Corporation Limited, on the issue of Refund arising out of finalisation of Provisional Assessment

2 In this case there was Customs Appeal No.50429 of 2021 (DB) in the case of M/s. Indian Oil Corporation Limited vs Commissioner of Customs, New Customs House, Near IGI Airport, New Delhi arising out of Order-in-Appeal No.D-1/Gr.7/308/2019 dated 26.08.2019 passed by the Commissioner of Customs (Appeals), New Customs House, New Delhi. The appellant had filed refund claim arising out due to finalisation of the provisional assessment of a particular Bill of Entry whereby the appellant had imported petroleum products, crude oil, etc., and stored them in the bonded warehouse. The chronology of events is as follows:

Provisional assessment of bill of entry
06.01.2009, 02.04.2009 and 31.08.2009
final assessment of the warehoused B/Es
ii) 24.07.2009 -
iii) 16.09.2009 -
iv) 05.03.2010 -
The appellant filed four refund claims i.Rs. 76,21,139/- (later corrected as Rs.78,53,423/-)
ii.- Rs. 55,91,777/-
iii - Rs.35,49,386/-;
iv - Rs.33,15,827
Assistant Commissioner rejected the claims
Commissioner (Appeals), vide order dated 31.03.2011 set aside the assessment order and restored the refund claims to be considered afresh
passed the final re-assessment order under Section 18 of the Customs Act, 1962
appellant filed the refund claim for Rs.2,03,10,413/-
Assistant Commissioner vide order dated 16.09.2013 sanctioned the amount of Rs.1,25,74,088/- on the basis of final assessment order dated 02.04.2013 and rejected the balance amount of Rs.77,36,325/-.
appellant then filed a fresh refund application on 06.04.2018 for the balance amount of Rs.77,36,325/-
rejected as being filed beyond the period of one year from the final reassessment order
Party appeal with Commissioner (Appeal) has been rejected by the impugned Order-in-Appeal no.D-I/ Gr.7/308/2019 dated 26.08.2019.

3 The arguments from the appellant are that in case of provisional assessment under Section 18, provisions of Section 27 of the Act are not applicable and, therefore, the refund sanctioning authority is required to suo-moto grant refund without insisting on filing of refund application or taking into account, if there is any delay in filing the said application. Thus, there is no requirement to follow the procedure as prescribed in Section 27 of the Act.

4 The counter arguments from Revenue are that the refund claim has, therefore, attained finality as no appeal was filed against the order of final re-assessment dated 02.04.2013

5 The Hon'ble CESTAT has held that

i. the Apex Court in Mafatlal Industries Ltd. case 2002-TIOL-54-SC-CX-CB dealing with refund claims consequent upon finalisation of provisional assessment and in para-95, has held that if an independent refund claim is filed after the final decision under Rule 9-B(5) re- agitating the issues already decided under Rule 9-B -assuming that such a refund claim lies - and is allowed, it would obviously be governed by Section 11-B.

This case law squarely applies in the given situation.

ii. Gujarat High Court in the case of Hindalco Industries Ltd 2008-TIOL-477-HC-AHM-CUS has cited two situations as under

Duty paid provisionally Rs.100 Duty finally assessed Rs.60 Duty to be refunded Rs.40
Duty paid provisionally Rs. 100 Duty finally assessed Rs. 70 According to assessee correct duty payable Rs. 60
no need to file separate refund application since no claim for refund is made and Rs. 40 is to be refunded since the same is admittedly due.
admitted amount of refund of Rs. 30 would be returned and if the assessee seeks to claim Rs. 10 also (Rs. 70-Rs. 60) as refund, then it is necessary that refund claim is to be preferred within six months from the date of adjustment of duty.

The instant case is squarely covered by the second situation given above as stated in the Gujarat High Court in Hindalco Industries

6 In the present case, the refund has been sanctioned in terms of the final re-assessment order dt. 02-04-2013 but according to the appellant the refund payable is higher. In respect of the specified B/E though the amount claimed by the appellant was Rs.76,36,325/-, however, the amount assessed by the Assessing Officer was Rs.64,329/-. So, in order to claim any amount beyond what has been assessed, the appellant will have to comply with the conditions under Section 27 of Customs Act 1962.

7 In the instant case, on remand by the Commissioner (Appeals) on 31.03.2011, final re-assessment order dated 02.04.2013 was passed by the Assistant Commissioner. The amount paid in excess by the appellant was finally re-assessed and, therefore, the refund was allowed in consonance to the amount so assessed by the Adjudicating Authority. The refund sanctioning authority could not have gone beyond the assessment order and hence, there was no error in the order dated 16.09.2013 rejecting the refund of Rs.77,36,325/- as it was not part of the final re-assessment order. If the appellant had any grievance against the final re-assessment order, the proper remedy would have been to have challenged the same and get the final reassessed amount modified.

8 Thus keeping in view of the (a) Apex Court order in Mafatlal Industries Ltd. case 2002-TIOL-54-SC-CX-CB (b) Gujarat High Court order in the case of Hindalco Industries Ltd 2008-TIOL-477-HC-AHM-CUS & (c) and in appellant's own case Delhi High Court Order in the case of CC Vs. Indian Oil Corporation, 2012-TIOL-52-HC-DEL-CUS the appellant would be liable to file a refund application under Section 27 of the Act and the provisions of the limitation period and the principle of unjust enrichment would be applicable. The refund applications dt 06.04.2018 were filed after 5 years from the date of finalisation of re assessment i.e. on 02.04.2013

9 Moreover the final re-assessment order had attained finality .The refund could have been ordered within the four corners of the said order. In this regard one is guided by the decision of the Apex Court in the case of Priya Blue Industries Vs. Commissioner of Customs 2004-TIOL-78-SC-CUS and ITC Ltd. Vs. Commissioner of Central Excise, Kolkata 2019-TIOL-418-SC-CUS-LB that all assessments, including self-assessments are appealable and, therefore, unless the same is modified, no refund could be sanctioned

10 Considering all the above, the Hon'ble CESTAT did not find any merit in the party's appeal, and accordingly the same was rejected.

11 The Take a way from this Final Order No. 55946/2024-dt 28.06.2024 - 2024-TIOL-621-CESTAT-DEL are

a. It is wrong to assume that the whenever provisional assessments are being finalised as per Section 18 of the Customs Act 1962, any refund arising out of the final assessment has to be allowed, without any claim or application for the same in all cases and there is no need for filing a refund claim at all.

b. For the provisional assessments finalised, one has to see if the importer is seeking the refund claim more than what has been finalised in provisional assessment fialisation order and if so more important is the refund application has to be filed as per the time limits prescribed in Section 27 of Customs Act 1962

c. Most fundamental is in terms of the decision of the Apex Court in the case of Priya Blue Industries Vs. Commissioner of Customs 2004-TIOL-78-SC-CUS and ITC Ltd. Vs. Commissioner of Central Excise, Kolkata 2019-TIOL-418-SC-CUS-LB all assessments, including self-assessments are appealable and, therefore, unless the same is modified, no refund could be sanctioned

d. If any appellant is aggrieved of the final re-assessment order, the proper remedy would be to challenge the final re-assessment order and get the final reassessed amount modified

12 Last but not the least is refund claims shall always filed with in the time period and for correct amount as per re assessment order

(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)


TIOL Tube Latest

Dr. Shailendra Kumar, Chairman, TIOL Knowledge Foundation, addressing the gathering

Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.