2008 (1) TMI 108 - AT - Customs

Dispute over refund claim due to clerical error in special duty exemption under Customs Act

The case involved a dispute over a refund claim for excess payment due to non-claim of a special duty exemption. The Commissioner (Appeals) held that the ... Refund filed on realizing that SAD @ 4 % was exempted u/not. 20/06 – revenue contend that once the assessments have been made on the basis of the declaration made in B/E, non-claim of the exemption cannot be considered to be a clerical mistake which can be rectified u/s 154 – revenue plea is justified, refund cannot be claimed unless the assessment is challenged - claim for exemption needs a careful scrutiny by AO - non-claiming of exemption can’t be considered clerical mistake – refund denied Issues:Refund claim based on non-claim of exemption; Nature of clerical error under Section 154 of the Customs Act; Applicability of previous judgments on similar issues.Refund Claim Based on Non-Claim of Exemption:The case involved the appellants filing a refund claim for the excess amount paid due to the non-claim of special additional duty exemption at the rate of 4%. The original authority rejected the claim, citing the Apex Court decision in Priya Blue, which stated that a refund claim cannot be filed if the assessment order has not been challenged. The Commissioner (Appeals) held that the non-claim of the exemption was a clerical error and could be rectified under Section 154 of the Customs Act. The case was remanded back to the original authority for de novo assessment based on the appellant's submissions.Nature of Clerical Error under Section 154 of the Customs Act:The revenue, in its appeal, argued that non-claiming of the exemption cannot be considered a clerical or arithmetic mistake under Section 154. They relied on previous judgments, such as MMTC v. CC, Mumbai, and Jindal Saw Ltd. v. CC, Kandla, which emphasized that Section 154 can only be availed for excess payment due to calculation errors. The Tribunal held that challenging the assessment order is necessary for claiming a refund, as seen in the case of Jindal Saw Ltd. The revenue contended that the Commissioner (Appeals) erred in remanding the case for reassessment based on a clerical error.Applicability of Previous Judgments on Similar Issues:The appellants cited various cases, including UOI v. Aluminium Inds. Ltd. and Recording Centre v. CC, to support their argument that clerical errors, such as non-claim of exemption, can be rectified under Section 154. They also referred to Circular No. 528/27/86-Cus., which allowed corrections for accidental slips or omissions. However, the Tribunal, citing MMTC v. CC and Eurotex Indus. & Exports Ltd., held that non-claiming of exemption does not qualify as a clerical error under Section 154. The Tribunal emphasized that a claim for exemption requires careful scrutiny and cannot be considered a clerical mistake. The judgment concluded that the appeal was against the rejection of refund, not a refusal to rectify a mistake, and therefore, the order of the Commissioner (Appeals) was set aside, and the revenue's appeal was allowed.