2025 (12) TMI 39 - AT - Customs

Tribunal restores refund of excess customs duty, treating amendment-cum-refund request as valid challenge to Bill of Entry assessment

The Tribunal allowed the appeal, setting aside the order of the Commissioner (Appeals) and restoring the order of the Adjudicating Authority sanctioning ... Refund of excess customs duty paid - seeking amendment to Bill of Entry - error in declaring the country of origin in the Bill of Entry - Bill of Entry was not provisionally assessed but it was a case of final assessment - On Revenue appeal, Commissioner (Appeals) took the view that the appellant has not challenged assessment of Bill of Entry before the Commissioner (Appeals). Hence, they could not have filed their refund application directly. - HELD THAT:- The Adjudicating Authority was of the opinion that the refund claim cannot be entertained based on the letter, the appellant should have been directed to file an appeal before the concerned authority. The very fact that the appellant has sought amendment vide this letter, shows that the appellant carries a bonafide that he is following the correct procedure. If the procedure followed was not correct, it was for the Revenue to point out the error/defect to guide the appellant to file an appeal, which was not done in this case. The Adjudicating Authority has entertained the amendment cum refund request and after proper verification has sanctioned the refund claim. There are no merits in the impugned order passed by the Commissioner (Appeals) - appeal allowed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether a refund of excess customs duty paid on account of an apparent clerical error in declaring the country of origin in the Bill of Entry is maintainable without first challenging the assessment of the Bill of Entry in appeal. 1.2 Whether, on the facts, the amendment request to the Bill of Entry and the supporting documents sufficiently established that the goods were of Nepal origin and that excess duty had been paid. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of refund claim without prior appeal against assessment Interpretation and reasoning 2.1 The Tribunal noted that the excess duty arose solely because, while filing the Bill of Entry, the country of consignment was mistakenly mentioned as 'Northern Mariana Island' instead of 'Nepal', resulting in denial of exemption that was otherwise available for goods imported from Nepal. 2.2 The importer, immediately after the clearance, submitted a letter dated 24.08.2022 to the customs authority, expressly requesting amendment of the Bill of Entry to correct the country of consignment to 'Nepal' and simultaneously seeking consequential refund of the excess duty paid. 2.3 The Tribunal observed that the Adjudicating Authority entertained this composite request for amendment and refund, caused verification by departmental officers, and, being satisfied about the factual position, sanctioned the refund claim. 2.4 The Commissioner (Appeals) rejected the refund solely on the ground that the assessment in the Bill of Entry had not been challenged in appeal, treating the assessment as final and insisting that the only proper remedy was an appeal against such assessment. 2.5 The Tribunal held that, in the circumstances of an obvious clerical mistake in declaring the country of origin, where the assessee promptly approached the department through a letter seeking amendment and consequential refund and the department itself chose to entertain and act upon that request, it was not open to the appellate authority to invalidate the refund merely on the procedural ground that no separate statutory appeal against the Bill of Entry assessment had been filed. 2.6 It was further reasoned that if the department considered the procedure adopted by the importer (letter seeking amendment and refund) to be defective, it was incumbent upon the authorities to guide the importer to adopt the correct procedural course; no such guidance or objection was extended before the refund was sanctioned. Conclusions 2.7 The refund claim, arising from a bona fide and obvious clerical error in the Bill of Entry and supported by a contemporaneous request for amendment, was maintainable without the importer separately appealing the assessment order. 2.8 The Commissioner (Appeals) erred in setting aside the refund on the sole ground of non-filing of an appeal against the Bill of Entry assessment, and the order of the original authority sanctioning the refund was liable to be restored. Issue 2: Establishment of Nepal origin and excess duty payment Legal framework (as discussed) 2.9 The Tribunal proceeded on the basis, not in dispute, that exemption from customs duty was available for goods imported from Nepal, and that such benefit would not be available if the goods were of non-Nepal origin. Interpretation and reasoning 2.10 The Tribunal found no dispute regarding the factual origin of the goods as being from Nepal, as evidenced by the commercial invoice and Certificate of Origin, which were examined by the Adjudicating Authority and by the Tribunal. 2.11 The Tribunal emphasized that the goods were cleared from a land customs station at the Indo-Nepal border, making it 'quite obvious' that they could not have been of 'Northern Mariana Island' origin. 2.12 The Tribunal described the mis-declaration of the country of origin as an 'obvious' mistake, which should have been apparent even to the assessing customs officials at the time of assessment. 2.13 The Adjudicating Authority, after verification of the documents and facts, found that the goods were indeed of Nepal origin and that duty had been paid in excess due to the incorrect declaration, and therefore sanctioned refund of the excess amount. Conclusions 2.14 The factual record clearly established that the goods were of Nepal origin and eligible for the exemption; the excess duty paid arose solely due to a clerical error in indicating the country of origin in the Bill of Entry. 2.15 The Adjudicating Authority's sanction of the refund, after verification, was justified on the facts; the Tribunal upheld this finding and restored the original order granting refund. 2.16 The appellant was held entitled to consequential relief, if any, in accordance with law.