TaxTMI 
TaxTMI 
2025 (8) TMI 512
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....mpugned order of the Tribunal to the extent the Tribunal has allowed the appeal and set aside the order of the Commissioner (Appeals) remanding the matter to the Original Authority for de novo adjudication. The Tribunal has directed the Original Authority to verify the documents and sanction the refund, whereas the challenge by M/s Agrotech is to the order of the Tribunal only to the extent the Tribunal while directing the refund, has not granted the interest. 3. The facts to be noted for the purpose of decision in the appeals are, M/s Agrotech has been importing crude sunflower oil under HSN 15121110 from various countries including Ukraine on CIF basis and cleared the goods on payment of customs duty. Thereafter, M/s Agrotech filed a refund application under Section 27 of the Customs Act, 1962 ('the Act' for short) seeking refund of excess customs duty paid on account of imposition of 1% handling charges by the Customs Authorities at the time of import of goods. The refund authority issued a deficiency memo seeking additional information. On supply of the said information, a show-cause notice dated 24.04.2018 was issued to M/s Agrotech proposing to reject the refund claim on t....
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.... of the present case and has wrongly followed the decision of the Madras High Court which has been overturned by the Hon'ble Supreme Court. Further I find that the Commissioner's (Appeals) directions to examine the claim of unjust enrichment when the matter has already been examined and decided in favour of the appellant and the Revenue is not under appeal on this aspect of the Order-in-Original is not tenable in law. The Commissioner of Customs (Appeals) cannot in its appellate jurisdiction review the order of the refund authority which is not in dispute and has attained finality. Further the finding of the Commissioner (Appeals) that the goods have not been cleared under protest and hence the refund application is not maintainable is clearly beyond the refund proceedings as the refund sanctioning authority has rejected the refund application only on the ground that Notification is prospective in nature. Moreover, the Commissioner (Appeals) failed to appreciate that Section 27 does not require that the goods should be cleared under protest for claiming refund of excess payment of duty. Further I find that both the authorities have wrongly held that refund cannot be paid in cash si....
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..... It may be stated here that, the parties to these appeals in this judgment shall be referred as appellant for Customs and respondent for M/s Agrotech, wherever reference is made in the body of the judgment. Submissions of Sri. Jeevan J.Neeralgi, learned counsel for the appellant in CSTA No. 12/2020: 6. Sri. Jeevan J. Neeralgi, Advocate of the Customs in CSTA 12/2020 submits that, the appellant has challenged the Final Order No. 20449/2019 dated 31.05.2019 passed by the Tribunal allowing the refund claim preferred by the respondent and remitting the matter to the Adjudicating Authority for limited purpose of verification and quantification of the amount to be refunded, is clearly erroneous. 7. According to him, the respondent being an importer, imported the crude sunflower oil from various countries and cleared the goods on payment of customs duty. The respondent self-assessed the bills of entry under Section 17(1) of the Act, 1962 ('the Act' for short) and discharged the applicable customs duty for the period from April 2017 to July 2017 and September 2017 and October 2017. Hence, the imports were completed during the year 2017 and the bills of entry were assessed to cust....
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....] Provided that an order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order: Provided further that where the Commissioner (Appeals) is of opinion that any duty has not been levied or has been short-levied or erroneously refunded, no order requiring the appellant to pay any duty not levied, short-levied or erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in section 28 to show cause against the proposed order. (4) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision. (4A) The Commissioner (Appeals) shall, where it is possible to do so, hear and decide every appeal within a period of six months from the date on which it is filed. (5) On the disposal of the appeal, the Commissioner (Appeals) shall communicate the order passed by him to the appellant, the adjudi....
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.... to provisional assessment also. In view of the above, the self-assessment of bills of entry has attained finality. 16. After the self-assessment became final, the respondent made refund claim of duty discharged on 1% of the handling charges. 17. According to him, in view of the above admitted factual position, the issue now for consideration before this Court is, whether after the finalization of self-assessment of bills of entry, the refund sanctioning authority has jurisdiction to grant refund without there being modification/change in the self-assessment and grant of refund after finalization of assessment would amount to revising/reviewing the original concluded assessment without the authority of law? 18. The refund sanctioning authority cannot sit over the concluded assessment as an appellate/revisional authority, as no such power is conferred under the Act/Rules. The refund sanctioning authority has no jurisdiction to grant refund by overriding the concluded assessment. The Tribunal has completely ignored this jurisdictional aspect. 19. The contention of the respondent that the provision contained in Section 149 of the Act provides for amendment of bills of entr....
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....sort to the statutory remedy provided under the respective enactments since the levy would become outside the purview of the Act. The said proposition is squarely applicable to the facts of the present case. The Tribunal has not appreciated the same. 25. The respondent contended that, since the 1% of handling charges is held unconstitutional in the case of WIPRO Ltd. (supra), the same cannot be subjected to duty and hence, the levy of duty on 1% of handling charges is unconstitutional and at the same time, respondent has made refund claim under the provisions of the Act which is self-contradictory and legally untenable in view of the above referred constitutional Bench Judgment in the case of Mafatlal Industries Ltd. (supra). Further, as per the said judgment, the concluded assessments are not permitted to be re-opened on the ground that the levy has been held to be unconstitutional in some other person's case. 26. To fortify the said submission, Sri. Neeralgi relied upon the subsequent judgments of the Supreme Court in the cases of ITC Ltd. (supra) and Priya Blue Industries Ltd. v. Commr. of Customs (Preventive) [(2005) 10 SCC 433] wherein the Supreme Court has followed ....
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.... Ltd. V. Union of India [2010] 3 taxmann.com 256 (Bom) though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund of claim is not available as held by this Court in Priya Blue Industries Ltd. (Supra). xx xx xx xx xx 47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act." 27. With regard to substantial question of law not formulated in the memorandum of appeal and seeking permission of this Court to hear th....
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....igh Court is Rs.1 Crore. All the appeals below the said limit are liable to be withdrawn or rejected on the ground of monetary limit. However, an exception to the said monetary limit is also mentioned in the said Instruction. Paragraph 2 (C) of the said Instruction carves out an exception by stating that 'Classification and refund issues which are of legal and/or recurring nature' are saved. In the present case, the issue involves refund which is purely legal in nature. Hence, the appeal is maintainable before this Court. 32. He prays that, additional substantial questions of law be framed and answer the same in favour of the appellant and the appeal filed by the appellant be allowed by dismissing CSTA No. 8/2021 filed by the respondent. Submissions of learned counsel for M/s Agrotech/ respondent in CSTA No. 12/2020: Submissions on Maintainability of Appeal: 33. At the outset, Sri. P.B.Harish, learned counsel appearing for M/s Agrotech/respondent stated, in Circular No. F.No: 390/Misc/30/2023-JC dated 02-11-2023, the Department has set a monetary threshold of Rs. 1 crore below which it shall not file an appeal in the High Court. 34. Exceptions exist where an ....
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....llegal levy when taxes are collected due to misinterpretation or erroneous findings under the Act, entitling taxpayers to refund under the Act's provisions. 40. According to Sri. Harish, the Supreme Court in the case of Mafatlal Industries Ltd. (supra), emphasized the necessity of aligning tax collection with constitutional mandates, reinforcing that erroneous Interpretations leading to tax liability necessitate refunds. According to him, reading down Rule 10(2) i. In the context of Rule 10(2), reading down ensures that the provision does not infringe on taxpayers' rights by imposing arbitrary charges. ii. The Supreme Court declared the imposition of a notional 1% handling charge under Rule 10(2) unconstitutional, emphasizing that only actual charges should be included in the customs valuation. iii. The decision effectively read down Rule 10(2) of the Customs Valuation Rules to ensure compliance with constitutional mandates. He argued on inapplicability of the decision relied upon by the appellant's counsel: 41. In the case of ITC Ltd. (supra), the Supreme Court deals only with a mistaken payment of duty under the law as per Mafatlal I....
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....ng heard the learned counsel for the parties and perused the record, at the outset we may state that, CSTA No. 12/2020 has been admitted on the following substantial questions of law: 1) Whether the Tribunal is correct and justified in holding that notification No. 91/2017 application? has retrospective 2) Whether the Tribunal is correct in holding in following the judgment of the Hon'ble Supreme Court in the case of Wipro Ltd., when the respondent has not furnished documents from which value of the goods was ascertainable? 3) Whether the Tribunal is correct and justified in ordering the refund of the duty paid in DEPB scrips in cash? 48. Insofar as CSTA No. 8/2021 is concerned, the issue of maintainability of the appeal under Section 130A(3) of the Act has been raised by the Registry. Though we note the substantial questions of law as proposed by the respondent in the appeal as under, the record reveals that these proceedings arise from the request made by the respondent for refund of excess customs duty paid (including cess) on imports totalling to Rs. 40,64,285.19/- vide letter dated 13.01.2018: Whether the order of Tribunal is correct ....
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....to establish that the amount of duty in relation to which such refund is claimed, was collected from him and the incidence of such duty had not been passed on to any other persons as per the provisions of Section 27 of the Customs Act, 1962. 12. Further, it is observed that the applicant is claiming refund of customs duty paid on account of adding 1% handling charges to the CIF value of the imported goods cleared by them. Their contention is that the 1% handling charges should not be added to CIF value to arrive at the assessable value of goods. The above contention is contrary to Rule 10(2) Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (valid upto 25.09.2017) which reflects as - "(2) For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include - (a) the cost of transport of the imported goods to the place of importation; (b) loading, unloading and handling charges associated with the delivery of the imported goods at the place....
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.... Provided also that in the case of goods imported by sea or air and transhipped to another customs station in India, the cost of insurance, transport, loading, unloading, handling charges associated with such transshipment shall be excluded. Explanation:- The cost of casseport of the imported goods referred to in clause (a) includes the the ship demvarrage charges on charted vessels lighterage or barge charges." 14. In view of the deletion of erstwhile rule 2(b) and proviso (01) 1% handling charges shall not be added to CIF value to arrive at assessable value, from 26.09.2017 onwards. This is also evident from Para 4 of CBECS Circular No 39/2017-Cus. Dated 26.09.2017. Thus, inclusion of 1% handling charges till 25.09.2017 was correct and legal and the claim for refund of duty relevant to 1% handling charges appears to be not acceptable. 15. Further, as per the provisions of Section 27 of Customs Act. 1962, the application for refund should be accompanied by the documentary or other evidences to establish that the amount of duty in relation to which such refund is claimed is collected from him (claimant) or paid by him and the incidence o....
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....llowing manner: i. Imposition of customs duty on adhoc 1% handling charges is bad in law. ii. CBEC vide Circular No.39/2017 dated 26.09.2017, has clarified that the amendment to the Valuation Rules will be from retrospective effect. iii. The directions of Commissioner (Appeals) to examine the claim of unjust enrichment when the matter has clearly been examined and decided in favour of M/s Agrotech and the Revenue is not under appeal on this aspect of the Order-in-Original is not tenable in law. iv. Both the authorities have wrongly held that refund cannot be paid in cash since the duty was paid through DEPB scrips. 53. Sri. Neeralgi has prayed for framing of additional substantial questions of law in the manner which we have already reproduced in the aforesaid paragraph. 54. The objection of respondent to the additional substantial questions of law is that, question of modifications of assessment was not urged before the lower authorities and also such grounds need to be rejected being contrary to the established legal norms and principles of fair adjudication. 55. Having noted the substantial questions of law as framed on 26.03.2021, we....
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.... duty without demand and hence Mafatlal Industries Ltd. (supra) is not applicable. In fact, he relied upon ITC Ltd. (supra) to contend Mafatlal Industries Ltd. (supra) has no applicability in the facts, though we may state no such objection has been taken by the appellant before the authorities below. 56. In any case what is also important to be noted is that, after Commissioner (Appeals) passed the order and during the pendency of the appeal before the Tribunal, the Adjudicating Authority has passed an order dated 26.02.2019, whereby the Adjudicating Authority has dismissed the appeal by relying upon notification dated 26.09.2017 to hold that till 25.09.2017, 1% handling charges are includable on assessable value of goods. By the said notification, the Customs had deleted Rule 2(b) and proviso (ii), whereby according to the Customs, 1% handling charges shall not be added to CIF value effective from that date. In other words, before that date, 1% handling charges shall be added to CIF value. The Adjudicating Authority has also rejected the claim by relying upon Section 27 of the Act to hold that, no documents or other evidence(s) have been filed to show the duty in relation to r....