2018 (12) TMI 802 - HC - Customs

Customs authority's objection overruled, refund claims revived for reprocessing by deadline, focusing on duty pass-on issue.

Micromax Informatics Limited Versus The Union of India and ors.

Micromax Informatics Limited Versus The Union of India and ors. - 2019 (369) E.L.T. 543 (Bom.) Issues Involved:1. Rejection of refund claims by the customs authority.2. Requirement of reassessment of bills of entry for claiming refund.3. Compliance with deficiency memos issued by the customs authority.4. Legal provisions and amendments under the Customs Act, 1962.5. Applicability of Supreme Court and High Court judgments.Detailed Analysis:1. Rejection of Refund Claims by the Customs Authority:The Petitioner, a company registered under the Companies Act, challenged the orders passed by the customs authority rejecting their refund claims for the period between July 2014 to June 2015. The Petitioner had paid additional duty of customs (CVD) at higher rates and later claimed that they were entitled to a concessional rate of 1% CVD under Notification No. 12 of 2012, as amended, based on the Supreme Court judgment in M/s SRF Limited Vs. CC, Chennai.2. Requirement of Reassessment of Bills of Entry for Claiming Refund:The customs authority rejected the refund claims on the ground that the Petitioner had not submitted reassessed bills of entry. The authority relied on the Supreme Court judgments in M/s Priya Blue Industries and CC v. Flock India Ltd., which stated that an importer must challenge the assessment order to claim a refund. The Petitioner contended that there is no legal requirement for reassessment of bills of entry for claiming a refund, citing several judicial pronouncements supporting their position.3. Compliance with Deficiency Memos Issued by the Customs Authority:The customs authority issued multiple deficiency memos pointing out various deficiencies in the refund applications, including the lack of reassessed bills of entry. The Petitioner responded to these memos, arguing that there is no statutory requirement for reassessment under the Customs Act, 1962, and cited relevant case law to support their claim. Despite these representations, the authority maintained its stance and rejected the refund claims.4. Legal Provisions and Amendments Under the Customs Act, 1962:The Court examined the statutory provisions and amendments under Sections 17 and 27 of the Customs Act, 1962. Prior to the amendments effective from 8th April 2011, the Act required examination and assessment by the proper officer. Post-amendment, the Act introduced self-assessment by the importer and provided for verification and reassessment by the proper officer if necessary. The amended Section 27 allowed any person claiming a refund of duty or interest paid or borne by them to make an application without the need for reassessment of the bill of entry.5. Applicability of Supreme Court and High Court Judgments:The Court referred to the Delhi High Court's judgment in Micromax Informatics Limited, which held that post-amendment, the customs authority must consider refund applications even if the assessment order has not been challenged. The Court concurred with this view and noted that the statutory scheme had undergone significant changes, eliminating the requirement for reassessment for claiming refunds. The Court also acknowledged that the Petitioner had cited relevant case law, including the Delhi High Court's decision, which the customs authority failed to consider.Conclusion:The Court overruled the sole objection of the customs authority regarding the requirement for reassessment of bills of entry. The refund applications were revived, and the customs authority was directed to process them afresh, focusing solely on whether the Petitioner had established that the excess duty collected had not been passed on to any other person. The fresh order was to be passed by 31st January 2019.