2025 (11) TMI 1819 - AT - Customs

Refund of excess CVD denied for lack of contemporaneous documents under Sections 17, 149 and Notification 12/2012-CE

M/s. Minerva Enterprises Versus Commissioner of Customs (Import), Mumbai-I

CESTAT Mumbai dismissed the appeal filed by the importer seeking refund of excess CVD paid on 56 Bills of Entry by claiming benefit of concessional duty ... Refund of payment of excess CVD - benefit of N/N. 12/2012-CE (Sr. No. 263A) duty @1% - legality of the order refusing reassessment that was sought more than 4 years’ after clearance of goods for home consumption - HELD THAT:- It is to be brought on record that entire clearance of imported goods were completed by September, 2015 and for the first time Appellant had sought for reassessment of those 56 Bills of Entry vide its application dated 23.12.2019 after a lapse of more than four years, so as to avail benefit of the Notification No. 12/2012-CE that provides for concessional rate of duty @1% instead of @12%, which remained disputed initially but subsequently settled by the Hon'ble Apex Court in the case of SRF Limited, cited supra and in the mean time there was no movement initiated by Appellant, at the time of filing of Bills of Entry, depositing tax dues, upon clearance of goods or at any time thereafter, apparently for the reason that Appellant was unaware of the benefit available under the said notification, since it was never in the case of the Appellant that indeed it had tried to make payment of CVD @1% but system was not accepting the same, since to that effect not a single piece of evidence is brought on record. Going by Section 17 and its alleged provisions namely sub- Section 2, 3 & 4, that would deal with reassessment requiring examination or test of imported goods as well as the result of its verification/examination/testing of goods and going by proviso to Section 149 of the Customs Act, no reassessment or amendment of Bills of Entry or shipping bill, etc. can be done after the goods are cleared for home consumption or being exported except on the basis of documentary evidence which was in existence at the time of goods were cleared. Both the provisions would go to indicate that after clearance of goods neither reassessment nor amendment of the Bills of Entry could be done in the normal circumstances, unless the exceptions noted above, which is admittedly found absent in the Appellant’s case, apart from the fact that the sole purpose for reassessment was to enable the Appellant to get refund. The order passed by the Commissioner of Customs (Appeals), Mumbai Zone-I vide Order-in- Appeal No. MUM-CUS-KV-IMP-139/2021-22 NCH dated 31.12.2021 is hereby confirmed - Appeal dismissed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether reassessment of self-assessed Bills of Entry under Section 17 of the Customs Act can be sought more than four years after clearance of goods, solely to claim a lower rate of CVD based on an exemption notification and a subsequent Supreme Court decision. 1.2 Whether reassessment or amendment of Bills of Entry after clearance of goods is permissible under Sections 17 and 149 of the Customs Act in the absence of contemporaneous documentary evidence and any steps taken at the time of assessment, clearance, or immediately thereafter. 1.3 Whether a claim to benefit of an exemption notification and consequential refund of excess duty can be founded exclusively on (a) an alleged technical glitch in the customs EDI system and (b) judicial decisions rendered in other assessees' cases, including the decisions in SRF and Micromax. 1.4 Whether, in light of the law declared in ITC and Mafatlal, a concluded self-assessment can be reopened and refund granted on the basis of a decision rendered in another person's case, without the assessee having challenged or sought modification of its own assessments in time. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 & 2 - Reassessment under Sections 17 and 149 after clearance and after long delay Legal framework discussed 2.1 The Court examined Section 17(2), (3) and (4) of the Customs Act governing verification and reassessment of Bills of Entry, and the proviso to Section 149 governing amendment of Bills of Entry after clearance of goods. It noted that: * Reassessment under Section 17 operates in the context of verification, examination or testing of goods. * Under the proviso to Section 149, amendment of Bills of Entry or shipping bills after clearance for home consumption/export can be done only on the basis of documentary evidence in existence at the time of clearance. Interpretation and reasoning 2.2 All 56 Bills of Entry were finally assessed and goods cleared by September 2015. The appellant first sought reassessment only by letter dated 23.12.2019, i.e., after more than four years, and only to secure the lower 1% CVD rate under the exemption notification in view of the later Supreme Court decision in SRF. 2.3 The Court recorded that the appellant had not, at any point: * Claimed at the time of filing Bills of Entry that it had attempted to pay CVD at 1% and the system did not accept it; * Paid duty under protest; * Sought provisional assessment or any contemporaneous modification of the assessments; or * Produced any documentary evidence showing an attempt to claim the exemption or a system-refusal at the time of original assessments. 2.4 The letter of the Principal Commissioner (Imports), New Delhi dated 20.10.2016, relied upon by the appellant, was closely examined. The Court held: * The letter showed that system modification was required only for reassessment of Bills of Entry filed up to 16.07.2015. * It also showed that, from 17.07.2015, suitable amendments were made in the customs EDI system. * The reasons for such modification were linked to dismissal of the review petition in SRF on 15.07.2015, and did not establish any non-acceptance of lower CVD rate for the appellant's period in the manner alleged. 2.5 The Court noted the appellant's reliance on decisions emphasizing availability of reassessment and absence of an explicit time limit in Section 17(3)-(5), and on the plea that its application under Section 17 be treated as one under Section 149. However, it held that both provisions, read with their conditions, restrict post-clearance reassessment or amendment to cases where: * It is anchored in verification/examination of goods (Section 17), or * It is based on contemporaneous documentary evidence existing at the time of clearance (Section 149). 2.6 The Court found that: * The appellant's request was made long after clearance, purely to obtain a refund benefit arising from a later judicial decision, and not due to any contemporaneous factual or documentary ground. * No documentary evidence existing at the time of clearance was produced to satisfy the proviso to Section 149. * The only purpose of reassessment was to create a refund entitlement, which is not a permissible basis for reopening concluded assessments under Sections 17 or 149. Conclusions 2.7 The Court concluded that: * Reassessment under Section 17, or amendment under Section 149, of the self-assessed Bills of Entry post-clearance and after more than four years was not legally maintainable in the facts. * The application dated 23.12.2019 could not be treated as a valid request under either Section 17 or Section 149, there being no contemporaneous evidence or statutory ground permitting post-clearance reassessment/amendment. * The rejection of reassessment by the authorities below was legally justified. Issue 3 - Effect of alleged system glitch and reliance on Micromax and other case law Interpretation and reasoning 3.1 The appellant contended that a technical glitch in the customs EDI system prevented payment of 1% CVD, relying on: * The Principal Commissioner's letter dated 20.10.2016; and * The decision of the High Court in Micromax, which noted such glitches and allowed refund without reassessment. 3.2 The Court found that: * No specific evidence was produced that the appellant had in fact attempted to claim the 1% rate and was prevented by the system at the time of assessment. * The Principal Commissioner's letter, on its own terms, only addressed the need for system modification for Bills of Entry up to 16.07.2015 and did not prove that, for the appellant's Bills of Entry, the system rejected any lawful claim. * The appellant made no effort, contemporaneously, to bring any such alleged glitch to the department's notice or to seek provisional assessment, assessment under protest, or other remedial steps. 3.3 As to Micromax, the Court endorsed the adjudicating authority's detailed distinction, including that: * In Micromax, the importer had informed the department during assessment to make changes in the EDI system, requested provisional release, and paid duty under protest. * The importer in that case directly filed refund claims without reassessment, which were rejected on the ground that Bills of Entry had not been reassessed or appealed; the High Court then ordered processing of refund. * None of those steps - contemporaneous protest, communication, provisional assessment, or immediate follow-up - were taken by the appellant in the present matter. 3.4 The Court further accepted the revenue's contention that, even apart from these factual distinctions, the approach in Micromax regarding refund without reassessment stands overtaken by the later binding law declared in ITC, which emphasizes that refund cannot operate to unsettle self-assessment without recourse to appropriate proceedings to modify such assessment. Conclusions 3.5 The Court held that: * The plea of a system glitch was unsubstantiated and an afterthought. * The decision in Micromax was factually distinguishable and, in any event, could not override the binding principles subsequently affirmed in ITC. * The alleged glitch and reliance on Micromax did not confer any right to belated reassessment or refund. Issue 4 - Reliance on SRF, ITC and Mafatlal; refund based on decision in another's case Legal framework discussed 4.1 The Court considered: * The Supreme Court's clarification in ITC that orders of assessment or self-assessment must first be modified 'under other relevant provisions of the Act' before any refund under Section 27 can be granted; refund proceedings cannot themselves function to set aside or modify assessment. * The principle laid down in Mafatlal that a person cannot claim refund merely on the basis of a decision rendered in another person's case, nor treat such decision as discovery of a mistake of law enabling refund after assessments have become final. Interpretation and reasoning 4.2 Applying ITC, the Court held that: * Unless the appellant's self-assessment orders are modified in accordance with law through appropriate proceedings under the Customs Act, Section 27 cannot be invoked to obtain refund. * The appellant's attempt to use reassessment (long after clearance) only as a mechanical step to generate refund, after SRF, is contrary to the scheme clarified in ITC. 4.3 Applying Mafatlal, the Court quoted and relied on the principle that: * It is not open to any person to make a refund claim on the basis of a decision in another's case. * Once an assessment has become final for that person, it cannot be reopened nor can refund be claimed on the ground of a decision subsequently rendered in another's case. * Section 72 of the Contract Act and Section 17(1)(c) of the Limitation Act have no application to such refund claims. 4.4 The Court held that the appellant's case fell squarely within the bar articulated in Mafatlal because: * The appellant had allowed its assessments to attain finality without challenge. * It sought reassessment and refund solely on the strength of the decision in SRF and the subsequent recognition of system issues in another importer's case (Micromax). * The right asserted was not based on any contemporaneous challenge or action in the appellant's own assessments. Conclusions 4.5 The Court concluded that: * The appellant could not reopen its concluded assessments or claim refund merely on the basis of the Supreme Court judgment in SRF or the High Court decision in Micromax. * In view of ITC and Mafatlal, the claim to benefit of the exemption notification and consequential refund, without timely challenge or modification of the appellant's own assessments, was legally untenable. * The denial of reassessment and consequential refund by the authorities below was in conformity with binding precedent. 4.6 On the totality of the reasoning under the above issues, the Court upheld and confirmed the order of the Commissioner (Appeals) and dismissed the appeal.