2016 (7) TMI 1218 - HC - Customs

Refund of duty paid under protest along with interest - denial of benefit under notification no.012/2012 - countervailing duty - import of spinal needles for medical use - benefit of exemption of the additional duty (equivalent to sales tax) under notification no.21/2012 - payment of all duties and charges by petitioner for release of goods as demanded - whether benefit under notification no.012/2012 will be available to petitioner? - Held that - It is not the Customs case that the exemption under notification no.21 of 2012 was not initially allowed. It is also not the Customs case that any appeal was preferred by the department against the initial or tentative assessment made as reflected in the assessed bill of entry in such regard. Once the appellate order dealt with only the refusal to grant the exemption under notification no.12 of 2012 and allowed the appeal with the affirmative finding that the exemption demanded had been wrongfully denied, the only exercise left was to refund such amount and not seek to revisit the matter pertaining to the exemption granted under notification no.21 of 2012. The appraising refund section could not have reopened the assessment initially made and demanded the additional duty in derogation of notification no.12 of 2012 despite the same having been allowed earlier. Refund to be made to petitioner along with interest within four weeks from date - customs also to pay the cost assessed at ₹ 10,000/- to the petitioner - petition disposed off - decided in favor of petitioner.

Summary

Issues:
1. Denial of exemption under notification no.12/2012 for countervailing duty.
2. Reassessment of duty despite appellate order allowing exemption.
3. Validity of demanding additional duty in derogation of notification no.12/2012.

Analysis:
1. The petitioner imported spinal needles for medical use and claimed exemption under notification no.12/2012 for countervailing duty. The assistant commissioner initially denied the exemption, leading to the petitioner paying all charges before appealing under Section 128 of the Customs Act, 1962. The appellate order of August 5, 2014 set aside the assessment and allowed the exemption under notification no.12/2012, directing the refund of the excess duty paid.

2. Despite the appellate order's clear direction to refund the duty obtained in derogation of notification no.12/2012, the appraising authority revisited the issue and demanded additional duty, which was previously exempted under notification no.21/2012. The court noted that the appellate order only addressed the denial of exemption under notification no.12/2012, and the demand for additional duty was unwarranted post such a decision.

3. The order in original dated May 17, 2016, sought to impose additional duty despite the appellate order's findings. The court emphasized that once the appellate authority allowed the appeal and directed the refund based on notification no.12/2012, there was no justification for demanding additional duty in contravention of the exemption granted. The court allowed the writ petition, setting aside the duty imposition and ordering the refund with interest, emphasizing the Customs' error in revisiting the matter.

In conclusion, the court held that the petitioner was entitled to the refund as per the appellate order, and the demand for additional duty was unjustified. The Customs were directed to refund the appropriate amount promptly and pay costs to the petitioner.