Sai Exports Vs Commissioner of Customs (CESTAT Chennai)
CESTAT Chennai held that as duty was paid under protest period of limitation of one year envisaged in section 27(1B) of the Customs Act 1962 will not apply even if refund claim made out of a consequence of judgment/ decree/ order.
Facts- The appellant M/s. Sai Exports imported consignment of 100% Knitted Polyester Fabrics vide various Bills of Entry. They declared a price between USD 2.26 per kg and USD 4.0 per kg. After examination, the department enhanced the price between USD 2.85 per kg and USD 4.94 per kg. The declared value was thus rejected by the department. The appellant paid the duty under protest and cleared the goods.
The appellant filed an appeal before the CESTAT and then before Madras High Court to issue direction to allow refund and the same was allowed in favor of the appellant. Later a refund claim was filed before the Commissioner of Customs.
The refund claim before the Commissioner was rejected on the ground that it was time barred and premature.
Here, the question is whether Section 27(1B) of the Customs Act, 1962 which says that the limitation of one year has to be computed from the date of judgment, decree or order of court would come into application even if the duty is paid under protest.
Conclusion- In the case on hand, although refund claim is made out of a consequence of judgment, decree or order, the appellant having paid duty under protest, the limitation of one year envisaged in Section 27 will not apply.
Undisputedly, the department has accepted the order passed by the Tribunal and there is no appeal filed against the said order. It also requires to be mentioned that though the department has contended before the Hon’ble High Court that they are contemplating to file an appeal, they have not done so. The appellant was thus denied relief before a higher forum by contending that Department intends to file an appeal. Even after accepting the final order of Tribunal, they have not passed an order of final reassessment. The inaction on the side of the department cannot be a ground to reject the refund claim as premature.
FULL TEXT OF THE CESTAT CHENNAI ORDER
Brief facts of the case are that the appellant M/s.Sai Exports imported consignment of 100% Knitted Polyester Fabrics vide various Bills of Entry. They declared a price between USD 2.26 per kg and USD 4.0 per kg. After examination, the department enhanced the price between USD 2.85 per kg and USD 4.94 per kg. The declared value was thus rejected by the department. The appellant paid the duty under protest and cleared the goods. The present dispute is with regard to 21 Bills of Entry.
2. Subsequently, the department passed two speaking orders covering 16 Bills of Entry justifying and confirming the enhancement of value. The Orders-in-Original Nos.21613/2013 & 21615/2013 both dated 22.08.2013 were issued by the Assistant Commissioner of Customs (Group-3) rejecting the declared values and enhancing the same on the basis of NIDB data. Aggrieved by the above orders, the appellant filed two appeals before the commissioner (Appeals) who in terms of Orders-in-Appeal Nos.528 & 529/2014 dated 21.03.2014 rejected the appeals filed by the appellant and affirmed the orders passed by the authority enhancing the value of the goods.
3. Similarly, the department passed a speaking order covering 5 Bills of Entry justifying and confirming the enhancement of value. An Order-in-Original No.23733/2014 in January 2014 was issued by the Assistant Commissioner of Customs (Group-3) rejecting the value declared and enhancing the same on the basis of NIDB data. Aggrieved by the order, the appellant filed an appeal before the Commissioner (Appeals), Chennai. The appeal was allowed by the Commissioner (Appeals) vide OIA No.745/2014 dated 01.05.2014 thereby setting aside the order of adjudicating authority enhancing the value of the goods.
4. The appellant then filed appeals before CESTAT, Chennai against the order passed by Commissioner (Appeals) dated 21.03.2014. These appeals were allowed in favor of the appellant in terms of Final Order 40521-40522/2018 dated 01.03.2018 thereby setting aside the order passed by Commissioner (Appeals) who had confirmed the order of enhancement of value of imported goods. The department had also filed an appeal against the order passed by Commissioner (Appeals) dated 01.05.2014 before the CESTAT Chennai. This appeal was taken up by the Tribunal and in terms of Final Order No.40520/2018 dated 01.03.2018 the Tribunal dismissed the appeal filed by the department thereby upholding the order passed by Commissioner (Appeals) who had set aside the order of enhancement of value of the goods.
5. In essence, the enhancement of value of goods was ultimately set aside by the Tribunal in regard to Bills of Entry under dispute. Based on the final orders passed by the Tribunal, the appellant vide letter dated 06.04.2018 requested the department to carry out the final assessment. They also filed list of Bills of Entry which were subject matter of the dispute. They sent reminders on 04.06.2018 and 19.06.2018 in regard to the request for final assessment. Since there was no response from the department, the appellant filed Writ Petition 22120 of 2018 before the Hon’ble jurisdictional High Court of Madras seeking a direction to carry out the final assessment of the Bills of Entry. The department had then taken a contention that they are contemplating to file appeal against the order passed by the Tribunal. The Hon’ble High Court passed an order dated 14.11.20 18 wherein it was stated as under :
“5. Therefore, without expressing any view on the merits of the claim made by both sides, this writ petition is disposed of, for the present, however, by granting liberty to the petitioner to work out their remedy afresh, after the statutory appeal time is over. No costs”.
As the appeal time in respect of the final order passed by the Tribunal was not over, no positive direction was issued by the Hon’ble High Court.
6. Subsequently, the appellant filed a refund claim before the respondent on 07.08.2019. After due process of law, the refund claim was rejected for the following reasons:
(i) CESTAT Final Order No.40521-40522/2018 based on which the subject refund claim was filed is dated 01.03.2018 and the refund claim under Section 27 of the Customs Act,1962 has been filed on 08.2019 which is beyond one year from the date of CESTAT order. Hence the refund claim is rejected as time-barred.
(ii) Further, it is stated that CESTAT Order No.40521-40522/2018 dated 01.03.2018 which has been accepted by the Committee of Commissioners on 12.10.2018 relates to the OIO issued by the Asst. Commissioner of Customs (Group-3) and has not attained finality and is premature for claiming refund.
(iii) The appellant had not produced documents required for processing the refund claim such as (a) original of the Duplicate Importer’s copies of Bills of Entry and (b) Chartered Accountant certificate to rule out unjust enrichment.
7. Aggrieved by the above intimation of rejection dated 03.2020, the appellant filed appeal before the Commissioner (Appeals) who vide order impugned herein upheld the order passed by the original authority dismissing the refund claim as time-barred. Hence this appeal.
8. On behalf of the appellant Learned Counsel Shri S. Murugappan appeared and argued the matter. He submitted that the appeal relates to rejection of refund claim covering 21 Bills of Entry. In all these Bills of Entry, the duty was paid by the appellant under protest and they requested the Assistant Commissioner of Customs to issue a speaking However, the speaking orders were issued only on 22.08.2013 and in January 2014. The appeals filed against such orders travelled upto the Tribunal and vide Final Order No.40521-40522/2018 dated 01.03.2018 and Final Order No.40520/2018 dated 01.03.2018 the issue with respect to enhancement of value of the imported goods got settled in favour of the appellant.
9. Though the appellant requested for re-assessment / final assessment of the Bills of Entry pursuant to the order passed by the Tribunal setting aside the enhancement of value, the Department did not issue appropriate orders. The appellant approached the Hon’ble High Court of Madras requesting to issue a direction to the Department for reassessment. A contention was raised by the Department that they are intending to file appeal against the order passed by the Tribunal. Since the appeal time was not over, the Hon’ble High Court disposed the writ petition granting liberty to the petitioner to work out their remedy afresh.
10. The appellant then filed an application for refund of excess duty paid by them under protest. The refund claim was filed on 07.08.2019. A Deficiency Memo dated 03.09.2019 was issued by the original authority to the appellant’s old address. The new address was intimated in person by the appellant on 19.12.2019 and the deficiency memo was also collected in person. The appellants were informed that the Assessing Group has been asked to carry out the consequential reassessment as per the Tribunal’s order and to quantify the amount of eligible refund. It is submitted by the Ld. Counsel that to the appellant’s surprise an intimation dated 19.03.2020 was issued by the department wherein it was stated that the refund claim has been rejected on the ground of being premature, incomplete and time-barred.
11. Ld. Counsel submitted that the original authority while rejecting the refund claim has observed that the CESTAT Final order based on which the refund claim is filed is dated 01.03.2018 and the refund claim under Section 27 of the Customs Act, 1962 has been filed on 07.08.2019 which is beyond one year from the date of CESTAT order and therefore time-barred. Referring to the relevant section as it stands amended with effect from 08.04.2011, Ld. Counsel submitted that the period of one year stated in sub-section (1B) of Section 27 will not apply to the present case as the duty has been paid under protest. The appellant having paid the duty under protest it is clear that the second proviso to sub-section (1) of Section 27 will apply and the limitation of one year is of no consequence. Section 27 as it stands amended after 08.04.2011 is reproduced as under :
“SECTION 27 Claim for refund of duty.-
