Case Law Details
Vishal Metal Industries Vs Commissioner of Customs (CESTAT Allahabad)
CESTAT Allahabad held that customs duty leviable on manufacturing of stainless steel coils under Advance Authorisation Scheme is exempt. Accordingly, appellant is entitled to refund of CVD paid on the same.
Facts- The appellant is engaged in manufacturing of Stainless Steel Utensils and is registered with GST department. The appellant filed two bills of entry both dated 09.09.2017 for import clearance of ‘stainless steel coils’. The appellant had imported the said goods under Advance Authorization Scheme. At the time of import, CVD @ 18.95% and IGST @ 18% were levied in terms of Notification No. 1/2017-Customs (CVD) dated 07.09.2017 which was paid by the appellant and got the goods cleared.
The raw materials imported under Advance Authorization Scheme were exempted vide Notification No. 18/2015-Cus dated 01.04.2015 from all kind of duties i.e. Basic Customs duty, whole of the additional duty, safeguard duty and anti dumping duty. Further, Government of India issued Notification No. 1/2017-Cus (CVD) dated 07.09.2017 whereby CVD has been levied @ 18.95% minus anti-dumping duty u/s. 9 of the Customs Tariff Act, 1975. Thereafter, Government of India vide Notification No. 79/2017-Cus dated 13.10.2017, exempted CVD levied u/s. 9 of the Customs Tariff Act, 1975 when goods imported under Advance Authorization Scheme. Accordingly, DGFT also issued Notification No. 33/2015-2020 dated 13.10.2017 to exempt CVD under Advance Authorization Scheme.
Thereafter, the appellant filed refund claim of CVD amounting to Rs. 16,31,373/- on account of exemption granted under aforesaid exemption Notification dated 13.10.2017. The adjudicating authority rejected the refund on the ground that Notification in question is not applicable retrospectively in the appellant’s case.
Commissioner (Appeals) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the appellant is engaged in manufacturing of Stainless Steel coils against Advance Authorisation Scheme for the purpose of manufacturing and therefore export of the same as per the Advance Authorization Scheme and also the Foreign Trade policy all kinds of duties leviable under Custom Tariff Act are exempted.
Held that the appellant is entitled to the refund of the CVD in view of the law laid down by the various judgments of the High Courts cited (Supra); therefore, I allow the appeal of the appellant and hold that the appellant is entitled to refund claim of CVD amounting to Rs. 16,31,373/- along with interest as prescribed by law. Appeal is accordingly allowed.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
The present appeal is directed against the impugned order dated 26.10.2020 whereby the Commissioner (Appeals) upheld the Order-In-Original and dismissed the appeal of the appellant.
2. Briefly the facts of the present case are that the appellant is engaged in manufacturing of Stainless Steel Utensils and is registered with GST department. The appellant is also engaged in importing and exporting of goods for which the appellant is having IEC No. 3302002203.
2.2 The appellant filed two bills of entry No. 3171879 and 3172213 both dated 09.09.2017 for import clearance of ‘stainless steel coils’. The appellant had imported the said goods under Advance Authorization Scheme. At the time of import, CVD @ 18.95% and IGST @ 18% were levied in terms of Notification No. 1/2017-Customs (CVD) dated 07.09.2017 which was paid by the appellant and got the goods cleared.
2.3 At the time of import, the appellant requested to assess the goods provisionally on furnishing of security in the shape of 100% bank guarantee but the respondent did not agree and assessed the goods finally on payment of CVD which was paid by the appellant under protest.
2.4 The raw materials imported under Advance Authorization Scheme were exempted vide Notification No. 18/2015-Cus dated 01.04.2015 from all kind of duties i.e. Basic Customs duty, whole of the additional duty, safeguard duty and anti dumping duty leviable under Section 3, 88, 8C and 9A of the Customs Tariff Act. Further, Government of India issued Notification No. 1/2017-Cus (CVD) dated 07.09.2017 whereby CVD has been levied @ 18.95% minus anti dumping duty under Section 9 of the Customs Tariff Act, 1975. Thereafter, on account of various representations of the trade associations, Government of India vide Notification No. 79/2017-Cus dated 13.10.2017, exempted CVD levied under Section 9 of the Customs Tariff Act, 1975 when goods imported under Advance Authorization Scheme. Accordingly, DGFT also issued Notification No. 33/2015-2020 dated 13.10.2017 to exempt CVD under Advance Authorization Scheme.
2.5 Thereafter, the appellant filed refund claim of CVD amounting to Rs. 16,31,373/- on account of exemption granted under aforesaid exemption Notification dated 13.10.2017 and he has filed various documents to substantiate the claim. The adjudicating authority rejected the refund on the ground that Notification in question is not applicable retrospectively in the appellant’s case and the judgments relied upon by the appellant is not applicable as the appellant was not the party in the said cases before the Hon’ble High court, thereafter, the appellant preferred first appeal before the Commissioner (Appeals) and the Commissioner (Appeals) dismissed the appeal vide impugned order. Hence, the present appeal.
3. Heard both the parties and perused the material on record.
4. Counsel for the appellant submits that the impugned order is not sustainable in law as the same has been passed by ignoring the precedent decisions on identical issues. He further submits that appellant imported the goods under Advance Authorization Scheme for processing and manufacturing of goods meant for export and there is no duty on export of goods. He further submits that under Advance Authorization Scheme, raw material can be imported without payment of all kind of customs duty and this has been done for increasing the export of goods. He further submits that levy of CVD under Section 9 on goods imported under Advance Authorization Scheme was never the intention of the government and same has been rectified vide Notification No. 79/2017-Cus dated 13.10.2017.
4.2 He further submits that Foreign Trade Policy (FTP) 2015-2020 was notified by Trade Notification No. 1/2015-2020 dated 01.04.2015 and Notification No. 18/2015-Cus dated 01.04.2015 was issued to regularize FTP and enabling the duty of raw material under Advance Authorization Scheme. He further submits that levy of CVD under Section 9 is completely against the government intention and object of the whole scheme and upon the representation made by various Associations, government has rectified its mistake and exempt the goods from payment of CVD vide Notification No. 79/2017-Cus dated 13.10.2017.
5. He further submits that the Ld. Commissioner (A) did not consider the judgment of Delhi High Court and held that the Notification does not indicate any retrospective application. He further submits that Hon’ble Delhi High Court in case of M/s Priyanka India Private Limited and others W.P.(C) 9898/2017 has granted benefit of the same Notification to the import made prior to 13.10.2017 by giving retrospective effect. He further submits that in the present case the appellant has already exported the goods and has submitted proof of export i.e. Export obligation discharge certificate issued by DGFT. He further submits that when the goods has been exported and all conditions are fulfilled, then the appellant is entitled to refund in view of judgment dated 16.08.2018 of Hon’ble Delhi High Court cited (Supra). He further submits that this issue is no more res integra and squarely covered by following judgments of various High Courts:
(i) Jindal Dyechem Industries Pvt. Ltd. reported as 2018 (17) GSTL
(ii) M/s Narendra Plastic Private Limited Vs. Union of India 2017 (4) GSTL 439 (Del).
(iii) M/s JTL Infra Limited Vs Union of India 2019 (29) GSTL 303 (Del)
(iv) M/s Prince Spin tex Pvt. Ltd. Vs Union of India reported as 2020 (35) GSTL 261 (GU)
(v) Sana than Textile Pvt. Ltd. Vs. Union of India, 2023 (68) GSTL 246 (Bombay).
6. He further submits that the Ld. Commissioner (Appeals)) has traveled beyond the scope of appeal in as much as maintainability of refund claim was not before him. In the appeal before him, Ld. Commissioner (Appeals) was required to decide the issues in the four comers of the appeals and issues decided by the Adjudicating Whether refund claim is maintainable, in the absence of challenge to assessment was never the issue before him, so by deciding this issue, Ld. Commissioner (Appeals) has travelled beyond the scope of appeal and such ground of rejection is not sustainable.
7. He further submits that Ld. Commissioner (A) has failed to consider Section 149 of the Act which empowers the Assessing Authority to amend the bill of entry on the basis of exemption notification available at the time of import. He further submits that the Hon’ble Delhi High Court as well as various other high courts has held that Notification No. 79/2017 had retrospective applicability and therefore, said notification was available at the time of import.
8. On the other hand, Ld. AR reiterated the findings of the impugned order.
9. After considering the submissions of both the parties and perused the material on record, I find that the appellant is engaged in manufacturing of Stainless Steel coils against Advance Authorisation Scheme for the purpose of manufacturing and therefore export of the same as per the Advance Authorization Scheme and also the Foreign Trade policy all kinds of duties leviable under Custom Tariff Act are Further, I find that the Government of India vide Notification No. 1/2017-Customs dated 07.09.2017 imposed CVD @ 18.95% under Section 9 of Customs Tariff Act, but thereafter, trade associations made various representations and thereafter, the government vide Notification No. 79/2017-Cus dated 13.10.2017 exempted the CVD. DGFT also issued Notification No. 33/2015-2020 dated 13.10.2017 to exempt CVD under Advance Authorization Scheme. In fact, the government rectified its mistake vide Notification No. 79/2017-Cus dated 13.10.2017 exempted the CVD. The question arose before the various High Courts regarding the retrospective applicability of Notification No. 79/2017 and the various High Courts in various decisions cited (Supra) granted the benefit of Notification in similar circumstances. The refund has been rejected on the ground that the applicant was not the party in the said case before the High Court as held that Notification No. 79/2017 dated 13.10.2017 has retrospective applicability.
10. I have gone through the judgments cited (Supra) and is of the considering opinion that the appellant is entitled to the refund of the CVD in view of the law laid down by the various judgments of the High Courts cited (Supra); therefore, I allow the appeal of the appellant and hold that the appellant is entitled to refund claim of CVD amounting to Rs. 16,31,373/- along with interest as prescribed by law. Appeal is accordingly allowed on the above terms.
(Order pronounced in the open court on 29.10.2024)
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