Principal Commissioner of Customs Vs Lava International Limited (CESTAT Delhi)
CESTAT Delhi held that in case of amendment in Bill of Entry, period of limitation should be counted from the date of amendment and not from the date of assessment of Bill of Entry.
Facts- M/s Lava International Limited (respondent) imported mobile phones during February 2014 to July 2014 classifying them in the Bills of Entry under Customs Tariff Item 8517 12 90. The respondent also imported parts and accessories of mobile phones during the said period. Additional duty of customs leviable u/s. 3(1) of the Tariff Act @ of 6% under Serial No. 263A of the Notification No. 12/2012-CE dated 17.03.2012 was paid by the respondent.
Under the said Notification a manufacturer is also given an option to pay excise duty at the rate of 1% on mobile phones subject to the fulfillment of the condition that CENVAT credit on inputs and capital goods is not claimed under rule 3 read with rule 13 of the CENVAT Credit Rules, 2004 for manufacture of the mobile phones.
Likewise, under Serial No. 132 of Notification No. 1/2011-CE dated 01.03.2011, as amended by Notification No. 16/2012-CE dated 17.01.2012, a manufacturer is also given an option to pay excise duty at the rate of 2% on ‘parts, components and accessories namely, battery chargers, PC connectivity cables, memory card and hands-free headphones of mobile handsets’ falling under any Chapter under the Tariff Act subject to non-availment of CENVAT.
The above benefits were not availed by the respondent at the time of import as it was under an impression that it did not satisfy the condition set out in the Notification.
The issue relating to applicability of conditions of non-availment of CENVAT credit in relation to the imported goods under the Notification was settled by the Supreme Court in favour of the importers in SRF Ltd. vs. Commissioner of Customs, Chennai.
After the judgment was delivered by the Supreme Court, the respondent filed letters dated 16.05.2015 and 05.06.2015 for re-assessment of BOE and also claimed refund of differential CVD. This refund request was rejected verbally and the respondent was asked to get re-assessment of these BOE.
BOE were initially re-assessed in March 2018 by the Deputy Commissioner by manually/physically making the requisite changes in the duty liability on the face of BOE, but the Deputy Commissioner, by a letter dated 22.11.2018, amended the reassessment orders u/s. 154 of the Customs Act, 1962 to the effect that the word ‘re-assessed’ was directed to be read as ‘amendment’ u/s. 149 of the Customs Act. This order amending BOE has been accepted by the customs authorities as no appeal has been filed by the department.
Consequently, the respondent applied for refund of differential CVD. The refund applications were rejected by the Assistant Commissioner for the reason that they were time barred.
Two issues would, therefore, have to be examined in this appeal, namely, as to whether refund could have been claimed by the respondent as the Bills of Entry were amended under section 149 of the Customs Act and whether the refund claims filed by the respondent were barred by time.
Conclusion- If the department felt aggrieved by the order seeking an amendment in the Bills of Entry under section 149 of the Customs Act, it was for the department to have assailed the order by filing an appeal under section 128 of the Customs Act. This plea could not have been taken by the department to contest the claim of the respondent while seeking refund filed as a consequence of the reassessment of the Bills of Entry or amendment in the Bills of Entry.
Held that if section 149 of the Customs Act relating to amendment in the Bills of Entry is made applicable, the cause of action for claiming refund would arise only after the amendment is made and so the limitation for claiming refund would start from that date.
FULL TEXT OF THE CESTAT DELHI ORDER
M/s Lava International Limited1, respondent in all the six appeals filed by the department, imported mobile phones during February 2014 to July 2014 classifying them in the Bills of Entry under Customs Tariff Item 2 8517 12 90 of the First Schedule to the Customs Tariff Act, 19753. The respondent also imported parts and accessories of mobile phones during the said period. Additional duty of customs 4 leviable under section 3(1) of the Tariff Act @ of 6% under Serial No. 263A of the Notification No. 12/2012-CE dated 17.03.2012 was paid by the respondent. Under the said Notification a manufacturer is also given an option to pay excise duty at the rate of 1% on mobile phones subject to the fulfillment of the condition that CENVAT credit on inputs and capital goods is not claimed under rule 3 read with rule 13 of the CENVAT Credit Rules, 20045 for manufacture of the mobile phones. Under Serial No. 132 of Notification No. 1/2011-CE dated 01.03.2011, as amended by Notification No. 16/2012-CE dated 17.01.2012, a manufacturer is also given an option to pay excise duty at the rate of 2% on „parts, components and accessories namely, battery chargers, PC connectivity cables, memory card and hands-free headphones of mobile handsets‟ falling under any Chapter under the Tariff Act. This is also subject to the fulfillment of the condition that CENVAT credit on inputs and capital goods is not claimed. The above benefits were not availed by the respondent at the time of import as it was under an impression that it did not satisfy the condition set out in the Notification.
2. The issue relating to applicability of conditions of non-availment of CENVAT credit in relation to the imported goods under the Notification was settled by the Supreme Court in favour of the importers in SRF Ltd. vs. Commissioner of Customs, Chennai6. The Supreme Court also dismissed the review petition filed by the department and the decision is reported in 2016 (340) E.L.T. A202(S.C.).
3. After the aforesaid judgment was delivered by the Supreme Court in SRF, the respondent filed letters dated 16.05.2015 and 05.06.2015 for re-assessment of the Bills of Entry and also claimed refund of differential CVD. This refund request was rejected verbally and the respondent was asked to get re-assessment of these Bills of Entry. The Bills of Entry were initially re-assessed in March 2018 by the Deputy Commissioner by manually/physically making the requisite changes in the duty liability on the face of the Bills of Entry, but the Deputy Commissioner, by a letter dated 22.11.2018, amended the reassessment orders under section 154 of the Customs Act, 19627 to the effect that the word „re-assessed‟ was directed to be read as „amendment‟ under section 149 of the Customs Act. This order amending the Bills of Entry has been accepted by the customs authorities as no appeal has been filed by the department.
4. Consequently, the respondent applied for refund of differential CVD and the details of the six refund applications are as follows:
