2016 (3) TMI 431 - HC - Customs

Court overturns decision on refund claims for excess countervailing duty payments, stresses importance of Section 27.

Micromax Informatics Limited Versus Union of India & Others

The court overturned the Assistant Commissioner's decision to reject refund claims for excess countervailing duty payments by a mobile phone importer. ... Clim of refund - Excess payment of CVD at the time of import - Rejection of refund claim on the groun of maintanability filed under Sections 27(1)(a)/ 27(1)(b) of the Customs Act, 1962 - Petitioner claimed that it was liable to pay 1% CVD as per Notification No. 12/2012 – CE dated 17th March 2012, as amended by Notification No. 4/2014 and further amended by Notification No. 12/2015-CE dated 1st March 2015 whereas paid 6% CVD and also in case of a self-assessment, a refund application could be maintained under Section 27 of the Act, as it stood prior to 8th April 2011 - Held that:- there was indeed no assessment order as such passed by the customs authorities. Although under Section 2(ii) of the Act, the word ‘assessment’ includes a self-assessment, the clearance of the goods upon filing of the B/E and payment of duty is not per se an 'assessment order' in the context of Section 27(1)(i) as it stood prior to 8th April 2011, particularly if such duty has not been paid under protest. In any event, after 8th April 2011, as noticed hereinbefore, as long as customs duty or interest has been paid or borne by a person, a claim for refund made by such person under Section 27(1) of the Act as it now stands, will have to be entertained and an order passed thereon by the authority concerned even where an order of assessment may not have reviewed or modified in appeal. Therefore, the order rejecting the refund claim of the Petitioner on the ground of maintainability was, for the aforementioned reasons, plainly erroneous. - Decided in favour of petitioner Issues:1. Refund claims rejection by Assistant Commissioner2. Interpretation of Section 27 of the Customs Act, 1962Issue 1: Refund claims rejection by Assistant CommissionerThe judgment involves three writ petitions challenging the rejection of refund claims by the Assistant Commissioner for bills of entry filed for August, September, and October 2014. The petitioner, a mobile phone importer, claimed excess payment of countervailing duty (CVD) based on specific notifications. Despite paying CVD without protest, the refund applications were filed. The Assistant Commissioner rejected the claims citing that duty was payable as per the assessment order, and unless reviewed or modified, a refund claim was not maintainable. The petitioner argued citing relevant case laws and provisions.Issue 2: Interpretation of Section 27 of the Customs Act, 1962The judgment extensively analyzed the changes in Section 27 of the Customs Act, particularly post-April 8, 2011. It highlighted that a person can claim a refund of duty or interest regardless of whether it was paid pursuant to an assessment order. The court emphasized that once an application is made under Section 27(1), the authority must determine the refundability. The judgment clarified that the authority cannot refuse to consider a refund application solely because no appeal was filed against the assessment order. The court also differentiated between self-assessment and assessment orders, noting that clearance of goods upon payment of duty is not an assessment order unless paid under protest. The judgment overturned the Assistant Commissioner's decision, emphasizing the need to entertain refund claims and pass orders based on the current provisions of Section 27.In conclusion, the judgment set aside the Assistant Commissioner's orders and directed a fresh review of the refund applications in accordance with the law. It highlighted the importance of considering refund claims irrespective of assessment orders, emphasizing the changes in Section 27 of the Customs Act post-April 8, 2011.