2015 (9) TMI 86 - HC - Customs

High Court Upholds Tribunal's Decision on Duty Refund for Imported Vessel

The Tribunal's decision to allow the refund claim for duty on Bunkers for an imported vessel used for dredging work was upheld by the High Court. The ... Refund of excess duty – Import of vessel for dredging work – Revenue challenges order passed by Tribunal setting aside Order-in-Original and allowing Appeal of assessee for refund of duty – Held that:- Tribunal found that vessel was put on par with Cargo Vessels and other categories which were noted in Board Circular No. 58/97 and as per clarification issued by Kandla Custom House – Thus, Cargo Vessels, Tanker Ships and Dredger Ships were to be treated at par – If refund claim was in respect of Bunkers on imported vessels namely dredger, then that could have been entertained and allowed – When such was approach of Tribunal, its order cannot be termed as perverse – Appeal fails and dismissed – Decided against revenue. Issues:1. Refund claim of duty on Bunkers for an imported vessel used for dredging work.2. Interpretation of Customs Act, 1962 regarding refund eligibility.3. Application of Board Circular and clarification by Kandla Custom House in determining refund eligibility.4. Tribunal's authority in allowing refund claims.Issue 1: Refund claim of duty on Bunkers for an imported vessel used for dredging workThe appellant challenged the order of the Customs, Central Excise and Service Tax Appellate Tribunal which allowed the refund claim of the assessee for duty paid on Bunkers corresponding to the quantity available during the export of the vessel. The Assistant Commissioner had initially rejected the refund claim, stating that excess duty paid on Bunkers of the vessel imported for dredging work could not be refunded. However, the Tribunal found that the vessel in question was treated similarly to Cargo Vessels and other categories as per Circular No. 58/97 and the clarification by Kandla Custom House. The Tribunal concluded that if the refund claim is for Bunkers on the imported vessel, it could be entertained and allowed, considering the peculiar circumstances of the case and the relevant circulars.Issue 2: Interpretation of Customs Act, 1962 regarding refund eligibilityThe Assistant Commissioner based the rejection of the refund claim on the premise that duty on the entire quantity of Bunkers for the dredger vessel had to be paid at the time of import. However, the Tribunal disagreed and allowed the refund claim, stating that the vessel in question, although imported for dredging work, could be considered for a refund of excess duty paid on Bunkers. The Tribunal's decision was supported by the interpretation of the Customs Act, 1962, and the specific circumstances of the case.Issue 3: Application of Board Circular and clarification by Kandla Custom House in determining refund eligibilityThe Tribunal's decision to allow the refund claim was heavily influenced by the Board Circular and the clarification provided by the Kandla Custom House. These documents were crucial in establishing that vessels like Cargo Vessels, Tanker Ships, and Dredger Ships were treated similarly, and therefore, the refund claim for Bunkers on the imported dredger vessel was valid. The Tribunal's reliance on these circulars was deemed appropriate and not erroneous.Issue 4: Tribunal's authority in allowing refund claimsThe Tribunal's decision to allow the refund claim was upheld by the High Court, which found that the Tribunal's approach was not perverse or vitiated by any legal error. The Court concluded that the Tribunal had considered the facts, circumstances, and relevant circulars in a reasonable manner, leading to the dismissal of the appeal by the Revenue. Consequently, the appeal was dismissed, affirming the Tribunal's decision to allow the refund claim for duty on Bunkers for the imported vessel used for dredging work.