2014 (3) TMI 1002 - HC - Central Excise

Denial of refund claim - Petitioner Company had made a request for clearance of the consignment as returned consignment without payment of Customs Duty, the Customs Authority insisted on treating the consignment as fresh import - application for rebate had initially been returned to the petitioners under cover of a letter dated 26th August, 2011, whereas customs duty was paid on 6th September, 2011 - Held that - Petitioners claimed exemption under notification No. 94/96 CUS dated 16th December, 1996. For availing benefit of the said notification, the Assistant Commissioner had to be satisfied that the goods which were imported were the same goods that had earlier been exported and further the importer had paid customs duty equal to the export benefit availed at the time of export of the concerned goods. - Since export of goods had been made along with claim for rebate of Cenvat duty of ₹ 92,391/-, and the importer could not prove that rebate had not been granted by the Central Excise authorities, the amount along with interest was charged as customs duty. The goods were released on payment of such customs duty - May be, at the material time the petitioners could not prove non-receipt of the claim for rebate and there was urgency in clearance of goods for which the petitioner paid the amount of the rebate claimed. Such payment was obviously made in the expectation that the petitioner would get the claim. If the claim had not been disbursed, there could be no question of realization of customs duty and customs duty, if realized would necessarily have to be refunded. Imported consignment was assessed at nil customs duty, accepting the contention of the petitioners that the same articles had been sent back. However, the amount of the refund claimed was realized by the customs authorities before allowing clearance of the consignment. May be, the petitioners were themselves negligent in not drawing the attention of the customs authorities to the return of their claim application. Perhaps, the petitioner should have objected to the realization of the amount refund of refund claimed, on the ground that the claim application had been returned. - If no customs duty was in fact payable by the petitioners, but duty realized on the premises that the petitioners had claimed rebate, the respondent customs authorities would be obliged to refund the amount realized through mistake on being satisfied that no rebate of Central Excise duty had actually been allowed. - refund amount shall positively be released within two months from the date of communication of this judgment and order. - Decided in favour of assessee.

Summary

Issues:
1. Claim for rebate of Central Excise Duty on exported goods.
2. Treatment of returned consignment by Customs Authorities.
3. Rejection of rebate claim by Maritime Commissioner.
4. Dispute regarding payment of customs duty and interest.
5. Entitlement to refund of amount collected by Customs Authorities.
6. Applicability of Customs Act and relevant notifications.
7. Obligation of Customs Authorities to refund wrongly realized amount.
8. Existence of alternative remedy of appeal.

Analysis:

1. The Petitioner Company exported goods and applied for rebate of Central Excise Duty. The goods were returned by the foreign importer due to non-compliance with specifications, resulting in the need for clearance by the Customs Authorities.

2. Despite the company's request for treating the consignment as a returned consignment, Customs Authorities insisted on treating it as a fresh import, leading to the payment of duty and interest by the company.

3. The Maritime Commissioner rejected the rebate claim, citing the company's failure to resist the demand by producing the forwarding letter as proof of non-receipt of rebate.

4. The company contended that they had paid Central Excise duty twice - at the time of export and upon return - due to Customs Authorities' insistence, resulting in excess payment of duty and interest.

5. The central issue was whether the company was entitled to a refund of the amount collected by Customs Authorities against the Bill of Entry.

6. The respondents argued under the Customs Act that goods re-imported into India attract customs duty unless exempted, and the company claimed exemption under a specific notification.

7. The Court acknowledged the entitlement of exporters to rebate Central Excise duty to encourage exports and highlighted the obligation of Customs Authorities to refund wrongly realized amounts.

8. Despite the existence of an alternative remedy of appeal, the Court allowed the writ petition for seeking the refund of the wrongfully realized amount, directing Customs Authorities to refund the Central Excise rebate amount if no rebate had been granted.

This detailed analysis covers the key issues and the Court's decision in the legal judgment, addressing the complexities of the rebate claim, treatment of returned goods, Customs Authorities' actions, and the entitlement to a refund under relevant legal provisions.