TaxTMI 
TaxTMI 
2014 (12) TMI 361
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.... the Commissioner(Customs) or his subordinate nor the authorities under the Special Economic Zones Act ("SEZ Act" for short) are taking any responsibility for processing such refund claims of the SEZ units. 2. As a test case, we may record the facts arising in Special Civil Application No.11876/2014. M/s. Anita Exports is a partnership firm, petitioner no.1 is a SEZ unit located in Kandla SEZ. The unit imported certain raw materials at Kandla. The goods were declared as used garments. The Commissioner of Customs, Kandla, however, disputed the valuation as well as the declaration of the goods made by the petitioners. He was prima facie of the opinion that the valuation of the imported goods declared by the petitioners was undervalued and further that the consignment did not contain used and old garments. A show cause notice dated 1.3.2012 therefore, came to be issued by the Commissioner(Customs) on the premise that value of goods was not Rs. 70,64,917/as declared but actually was Rs. 3,18,42,650/- and further that the imported consignment was not of worn clothes but clothes and other mixed goods. On such basis, he called upon the petitioners to show cause why : ....
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.... & nine hundred seventeen only) under section 111(d) and (m0 of the Custom Act, 1962. I give an option to the importer to redeem the goods on payment of fine of Rs. 30,00,000/( Rupees Thirty Lakhs only) under section 125(1) of the Customs Act, 1962. (iv) I impose a penalty of Rs. 10,00,000/( Rupees Ten Lakhs only) under section 112(a) of the Custom Act, 1962 on M/s. Anita Exports. (v) I also propose a penalty of Rs. 2,50,000/( Rupees Two lakhs fifty thousand only) under section 112(a) of the Customs Act, 1962 on Shri Juned Yakub Nathani, Partner of M/s. Anita Exports." 4. Since during the adjudication of the show cause notice, the petitioners had deposited an ad hoc amount of Rs. 25 lakhs with the Customs authority, the Commissioner of Customs passed addendum to the order-in-original appropriating such amount already deposited by the petitioners. 5. The petitioners challenged such order of the Commissioner(Customs) before the Customs Excise & Service Tax Appellate Tribunal ("the Tribunal" for short). The Tribunal allowed the appeal of the petitioners in part. Insofar as the goods which were in conformity with the letter of authority, the Tr....
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.... 8. Initially, the office of the Commissioner (Customs) asked for further documents and details from the petitioners which were duly supplied. However, ultimately on 23.7.2014, the Deputy Commissioner(Refund), Customs, Kandla, conveyed to the petitioners that under a communication dated 1.11.2012 issued by the Additional Director, Director General of Export Promotion (Ministry of Finance), New Delhi all the refund applications are required to be returned to the applicants whose units fall under the SEZ. The petitioners were requested therefore, to approach the Department of Commerce for refund. Along with this communication, a copy of said letter dated 1.11.2012 was also annexed. It would be necessary to record the contents of the said letter which reads as under: "Kindly refer to DGEP letter F.No.DGEP/SEZ/25/2011 dated 03.05.2010 on the above subject requesting for view on issue regarding proper officer for sanction of refund of Customs Duties paid on clearances made from SEZ. The reports received from the Chief Commissioner indicate that in some zones refund claims relating to excess Customs Duty paid by SEZ entities have been received.....
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....He stated as under: "In this context, it is to inform you that as on date there is no provision in the SEZ Act & Rules or Regulations made thereunder for refund of excess Customs Duty/Fine/penalty/Security Deposit etc. paid by the SEZ Units. Reference in this regard has been made by this office to the Ministry of Commerce from time to time requesting to make explicit provisions in the SEZ Act and Rules made thereunder for refund of excess Customs Duty/ Fine/Penalty/Security Deposit etc. The issue is under consideration at interministerial level to devise a proper framework for refund, review and appeal in respect of the same. Therefore, at present this office has no jurisdiction over processing and sanction of refund claims. In view of the above, your refund cannot be processes by this office until the incorporation of statutory provision in the SEZ Act or Rules made thereunder that authorizes Deputy Commissioner of Customs/Specified Officer or any such officer of this office to sanction the refund of excess Customs Duty/Fine/Penalty/Security Deposit etc till that time you may approach to the jurisdictional Customs Authority(Refund) to file y....
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....e to lack of any provision in the SEZ laws for dealing with the same. The issue was therefore, taken up with the Department of Commerce for incorporation of provisions leading to refund as well as appeal and review in the SEZ law to ensure disposal of cases related to this issue. Under the circumstances, pending refund applications had to be returned to the applicants with a advise to approach the Department of Commerce. It was further conveyed that if any appeal was pending, same may also be returned for approaching the Department of Commerce. 14. Two things immediately emerge from this letter. Firstly, that the Ministry of Finance also recognised that there was no mechanism under the SEZ Act and Rules framed thereunder for entertaining refund applications and secondly, that the Ministry was of the opinion that such a set up was required to be made by making suitable changes in law. In fact the communication does not stop short at covering refund applications for such treatment. It refers to appeals and reviews of proceedings concerning SEZ units. All such applications would be returned to the parties who would be advised to approach the Department of Commerce. 15. In our opinio....
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.... of duty. Sub-section (1) thereof provides for an application to be made by person claiming duty or interest in prescribed form to the prescribed authority within the prescribed time. Sub-section (2) of section 27 authorises the Assistant Commissioner of Customs or the Deputy Commissioner of Customs, if he is satisfied that whole or part of the duty or interest paid by the applicant is refundable, to make an order accordingly. Proviso to subsection(2) statutorily embodies the principle of unjust enrichment. 17. In case of Mafatlal Industries Ltd. and ors. v. Union of India and ors. reported in (1997) 5 Supreme Court Cases 536, the Constitution Bench of Supreme Court considered the statutory provisions under the Customs Act, 1962 and the Central Excise Act and held that any claim for refund would be covered by section 27 of the Customs Act or 11B of the Excise Act as the case may be. It was observed as under: "(i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991....