Refund claim dismissed after duty payment following pre-notice consultation under section 28 Customs Act

CESTAT Chennai dismissed the appellant's refund claim for duty amount deposited following pre-notice consultation under section 28 of Customs Act, 1962. The appellant paid differential duty after pre-notice consultation dated 9.10.2017 without demur, but later sought refund claiming no formal Show Cause Notice was issued. CESTAT held that pre-notice consultation was sufficient, and appellant's positive response by payment constituted acquiescence. The differential duty arose from classification mismatch, but appellant failed to seek rectification/re-assessment as required under settled law. Appeal dismissed for lack of merit.

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Issues Involved:
1. Classification of imported goods.
2. Entitlement to refund of duty and interest.
3. Compliance with procedural requirements under Section 28 of the Customs Act, 1962.

Summary:

1. Classification of Imported Goods:
The appellant imported aluminium framework from South Korea and classified the goods under CTH 7610 9020, claiming exemption from BCD (Sl. No. 610 of Notification No. 15/2009-Cus. dated 31.12.2009 as amended). The supplier had classified the same under CTH 8480.60. The error was discovered during scrutiny by the Risk Management System (RMS) of Customs, leading to a pre-consultative notice indicating a mismatch in classification and a demand for differential duty of Rs.96,34,170/-. The appellant paid the differential duty and interest.

2. Entitlement to Refund of Duty and Interest:
The appellant filed for a refund of duty and interest under section 27(1)(a) of the Customs Act, 1962, which was rejected by the Assistant Commissioner of Customs (Refunds) on several grounds:
- Differential duty was not paid under protest.
- No appeal was filed against the Deputy Commissioner's order.
- Refund did not arise from self-assessment but from Revenue's demand.
- The refund claim was premature and lacked sustainable grounds.

The first appellate authority upheld the rejection, leading to the current appeal.

3. Compliance with Procedural Requirements u/s 28 of the Customs Act, 1962:
The Tribunal examined whether the Revenue authorities were correct in rejecting the appellant's refund claim. Section 28 requires pre-notice consultation before issuing a Show Cause Notice (SCN). The appellant responded positively to the pre-notice consultation by paying the duty and interest, thus no SCN was issued. The Tribunal disagreed with the appellant's contention that the payment would assume the character of duty only when accompanied by a letter requesting non-issuance of a notice. The appellant's acquiescence to the pre-notice consultation meant no further action by the Revenue was necessary.

The Tribunal also referenced the Supreme Court's judgment in ITC Ltd. Vs. CCE, Kolkata, stating that self-assessment is appealable and any claim for refund must follow modification or re-assessment of the Bill of Entry. The appellant did not seek rectification or re-assessment but only a refund, which was rightly rejected by the original authority.

Conclusion:
The Tribunal found no merit in the appellant's case and dismissed the appeal, affirming the rejection of the refund claim. The order was pronounced in open court on 22.03.2024.

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