2017 (7) TMI 219 - AT - Customs

High Court directs Customs to consider refund claims based on Essentiality Certificates. CESTAT Chennai rules in favor of appellant.

RFB Rig Corporation LLC Versus Commissioner of Customs (Aircargo Complex), Chennai

The High Court directed Customs authorities to consider refund claims based on Essentiality Certificates. Despite rejection on limitation grounds, CESTAT ... Refund claim - N/N. 21/2002-Cus. dt. 1.3.2002 - time limitation - whether the discharge of customs duty liability on the imported goods by the appellant pursuant to the High Court order, can be treated as payment of duty under protest? - Held that: - the Hon’ble Apex Court in the case of RBF Rig Corporation Vs CC (Imports) Mumbai [2011 (2) TMI 1 - SUPREME COURT OF INDIA] held that once the High Court order was not challenged by Revenue, the same reached finality and the adjudicating authority cannot be permitted to circumvent the order passed by the High Court. The discharge of duty liability in respect of 28 Bills of Entry on the strength of the orders of the Hon’ble Delhi High Court, will necessarily have to be treated as payment of duty under protest and hence limitation of one year for claiming refund under Section 27 of the Customs Act, 1962 shall not apply in view of second proviso to sub-section (1) thereof. Appeal allowed - decided in favor of appellant. Issues involved:1. Duty exemption on imported goods due to absence of Essentiality Certificates.2. Rejection of refund claims by Customs authorities on the ground of limitation.3. Discrepancy in treatment of refund claims for different Bills of Entry.4. Interpretation of duty payment under protest and its implications.Issue 1: Duty exemption on imported goods due to absence of Essentiality Certificates:The appellant imported consignments without Essentiality Certificates required for duty exemption under Customs Notification No.21/2002-Cus. The Hon'ble High Court of Delhi issued interim and final orders directing Customs authorities to consider refund claims based on Essentiality Certificates. ONGC and DGH issued recommendatory letters and Essentiality Certificates after court orders. The appellant filed refund claims for duty paid during clearance, leading to subsequent rejection by Customs authorities.Issue 2: Rejection of refund claims by Customs authorities on the ground of limitation:Deputy Commissioner and Commissioner (Appeals) rejected refund claims for 23 and 5 Bills of Entry on grounds of limitation. CESTAT Chennai remanded the matter back to the adjudicating authority. In novo proceedings, refunds for 15 Bills of Entry were sanctioned, but 13 claims were rejected on the same ground. Commissioner (Appeals) upheld the rejection, leading to the appellant's appeal.Issue 3: Discrepancy in treatment of refund claims for different Bills of Entry:The appellant argued that all 28 Bills of Entry should be treated as paid under protest, citing High Court orders and legal precedents. The department opposed, highlighting the lack of protest for Chennai imports and non-claim of benefits under Notification No.21/2002-Cus. The appellant referenced a similar case in Mumbai where refund claims were allowed based on High Court orders.Issue 4: Interpretation of duty payment under protest and its implications:The core issue was whether duty payment following the High Court order could be considered under protest. The appellant contended that goods were released under protest as per court orders, while the department argued against the need for protest or provisional assessment. CESTAT Chennai found that duty payment under court orders qualifies as under protest, exempting it from the one-year limitation for refund claims under the Customs Act, 1962.The judgment analyzed the complex interplay of legal principles, court orders, and Customs regulations to determine the validity of refund claims based on duty payment under protest. It highlighted the significance of High Court orders, Essentiality Certificates, and the treatment of duty payment in challenging Customs decisions. The decision clarified the interpretation of duty payment under protest and its impact on the limitation period for refund claims, ultimately allowing the appeal and granting relief to the appellant.