TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 861
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Tribunal is right in not considering the legal issue that there cannot be an order of refund without application and that the application should be within the time stipulated in the statute? iii) Whether the extra duty deposit made by the 1st respondent partakes the character of customs duty so as to attract the provisions of Section 27 of the Customs Act? iv) Whether the claim of the respondent for refund would be contrary to the decision of the Supreme Court in the case of Mafatlal Industries Vs Union of India (1997 (98) ELT 247 (SC))? 2. The facts, in a nutshell, are as hereunder :- The 1st respondent imported RDB Palmolein (edible grade) and paid extra duty deposit (for short 'EDD') of Rs. 1,13,004/- for the purpose of provisional assessment of the imported goods, pending survey report. On submission of the report, the Department finalised the provisional assessment on 9.6.00 and forwarded the file to the Refund Section for refund of the EDD. The Assistant Commissioner of Customs (Refund), suo motu, passed an order on 15.9.05 holding that no refund application has been filed as required under Explanation II to Section 27 of the Act and the refund application shou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... duty liability that may arise in future as a safeguard and not as an advance deposit of extra duty, as the amount collected cannot be treated as duty until and unless the said deposit is adjusted towards such duty on finalisation thereof as per law. This is opposed to the duty already paid towards the declared quantity of the goods, where they would have been eligible for a refund of Rs. 7,164/- owing to the shortage, if they had filed a claim on time for the same in keeping with Explanation II to Sec. 27 ibid. Since this appeal is with respect to EDD and in view of the discussions above, the extra duty deposit made cannot be treated as a duty for the purpose of Explanation II to Section 27 and the said amount is liable to be refunded to the appellants. The appeal therefore succeeds. The case is disposed of as above." 4. Aggrieved by the order of the Commissioner (Appeals), the Department pursued the matter before the Tribunal. The Tribunal, while taking note of the fact that provisional assessment was finalised on 9.6.00, the file was forwarded to the refund section for refund of EDD and taking note of the statutory prescription, which says that the assessee is entitled to refu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be . Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9-B will not be governed by Section 11-A or Section 11-B as the case may be. However, if the final orders passed under sub-rule (5) are appealed against or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11-B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9-B (5) reagitating the issues already allowed, it would obviously be governed by Section 11-B. It follows logically that position would be same in the converse situation. " (Emphasis supplied) 6. Admittedly, it is not the case of the department that provisional assessment order, which has been finalised, is the subject matter of further appeal or any proceeding ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Notes on Clauses in relation to Section 18 of the Act indicate that Sub-sections (3), (4) and (5) to Section 18 of the Act, have been inserted to provide for a mechanism to regularise the payments of duty short levied and interest thereon and duties that are to be refunded on finalization of provisional assessment and in this context in the report of the Standing Committee on Finance it has specifically been noted that this amendment became necessary because Section 18 of the Act which provides for provisional assessment of duty presently (i.e.upto 12th July, 2006) does not provide for various issues arising from the finalization of provisional assessment. Thus it becomes apparent that the amendment in question is substantive in nature when one finds that various provisions have been inserted which were not forming part of the original Section 18 of the Act as it stood upto 12th July, 2006. It is not possible to state that the provisions for payment of interest on duty short levied or entitlement to interest on duty paid in excess of the finally assessed duty can be considered to be clarificatory provisions and in the same vein the newly inserted Sub-section (5) deserves consi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e respondent assessee was required to move an application under Section 27 of the Act and accordingly, the conditions stipulated in sub-section (2) of the Act are applicable. We may now notice here that the two situations, which have been specifically referred to by the Gujarat High Court in the case of Hindalco Industries Ltd.(supra). Two situations are as under : "9.1 Referring to Explanation II to Section 27 of the Act it was submitted that the same would apply to a case where after the final assessment and the adjustment, if still the Assessee is not satisfied with the adjustment and claims excess amount as refund. Explanation II will have no application in cases where admittedly after final adjustment, refund is due to the Assessee. This is explained with the following illustration: Duty paid provisionally Rs. 100 Duty finally assessed Rs. 60 Duty to be refunded Rs. 40 In this case Explanation II will have no application since no claim for refund is made and Rs. 40 is to be refunded since the same is admittedly due. Duty paid provisionally Rs. 100 Duty finally assessed Rs. 70 According to Assessee correct duty payable Rs. 60 In this case, admitted amount of refund of R....