2020 (2) TMI 7 - AT - Customs

Appellate tribunal limits refund claim under Customs Act, emphasizing jurisdiction boundaries.

The appellate tribunal allowed the appeal, holding that the first appellate authority exceeded its jurisdiction by initiating fresh proceedings not ... Relinquishment of title to the goods lying uncleared - non-disposal of the claim of appellant, in relation to the goods already cleared, for relinquishment, and refund, under section 26A of Customs Act, 1962 - HELD THAT:- It was not open to the first appellate authority to revisit a decision taken in favour of appellant save on appeal authorised by Commissioner of Customs. That apparently has not occurred yet. Moreover, proviso to section 128(3) of Customs Act, 1962 empowers the issue of show cause notice only for enhancing penalty or any other detriment or for rejection of refund sanctioned by the original authority. Proceedings that lie before the original authority can be initiated only under section 28 of Customs Act, 1962 or under section 124 of Customs Act, 1962 – neither of these envisages Commissioner of Customs (Appeals) as the ‘proper officer’. Consequently, the notice contemplated by proviso to section 128(3) of Customs Act, 1962 is limited to enhancement or reduction, as the case may be, within the confines of the notice that commenced proceedings leading to the appeal. The extent of enhancement or reduction was limited to such as were proposed in the original notice; there is no empowerment in section 128 of Customs Act, 1962 for a new proceedings or cause of action. Such would also not constitute an enhancement and, therefore, the issue of show cause notice leading to the specific direction in the impugned order is beyond the pale of law. Relinquishment of title to the goods is not permissible to goods that have already been cleared. Consequently, the claim for refund of section 26A is limited only to such as those which were uncleared and acknowledged as relinquished - There is no flaw in non-consideration of the claim in relation to the goods cleared by appellant - Appeal disposed off. Issues:1. Relinquishment of title to goods partially allowed under section 26A of Customs Act, 1962.2. Invocation of powers under proviso to section 128(3) of Customs Act, 1962 by first appellate authority.3. Revisiting of decision under section 26A of Customs Act, 1962 by first appellate authority.4. Entitlement to refund of duty on goods already cleared under section 26A of Customs Act, 1962.Analysis:1. The appellant imported goods which were found to be non-conforming with the sale contract. They sought relinquishment under section 26A of Customs Act, 1962, which was partially allowed for goods uncleared. The first appellate authority invoked powers under proviso to section 128(3) proposing rejection of relinquishment application and confiscation of goods under sections 111 and 112. The authority also directed sampling of uncleared goods and imposition of penalties if misdeclaration was found. The appellate tribunal noted that the first appellate authority exceeded its jurisdiction by initiating fresh proceedings not contemplated initially and held that the appellant was left in a worse position than before the appeal.2. The tribunal emphasized that the first appellate authority's jurisdiction was limited to the non-disposal of the claim for relinquishment and refund under section 26A for goods already cleared. It was deemed inappropriate for the authority to revisit a decision in favor of the appellant without proper authorization. The tribunal highlighted that the proviso to section 128(3) only allows show cause notices for enhancing penalties or rejecting refunds sanctioned by the original authority, limiting the scope of actions that can be taken.3. Regarding the entitlement to refund of duty on goods already cleared, the tribunal clarified that section 26A requires specific conditions to be fulfilled simultaneously. The appellant's claim for refund on cleared goods lacked evidence of compliance with the necessary conditions, such as re-exportation or destruction. Relinquishment of title to goods already cleared was deemed impermissible, restricting the refund claim under section 26A to goods acknowledged as uncleared.4. Ultimately, the tribunal allowed the appeal by setting aside the direction for further disposition of uncleared goods by the Additional Commissioner. It was concluded that there was no flaw in not considering the claim related to goods already cleared by the appellant, and the appeal was disposed of accordingly.