2010 (5) TMI 518 - AT - Customs

Refund - The respondents had paid export duty on the FOB value of the consignments without registering any protest. Therefore they cannot claim that they were aggrieved by the assessments treating the FOB value as transaction value. - the Circular No. 18/2008, dated 10-11-2008 issued by CBEC, it was clarified that by taking the FOB price declared by the exporter as cum-duty price and working backwards from the FOB price to determine the value for assessment - The excess duty claimed by the respondents considering the FOB price as cum-duty price is in accordance with law and the original authority should have allowed the refund - The Commissioner noted the legal position in this regard and observed that the error could be corrected invoking provisions of Section 154 of the Act and by reassessing the shipping bills under Section 17(4) of the Act - The Tribunal in the case of I.P. Rings Ltd. v. Commissioner, the respondents, the Tribunal in a similar case of erroneous assessment and collection of higher amount of duty, directed the assessing officer to reassess the Bill of Entry under Section 17(4) of the Act after allowing the assessee to amend the Bill of Entry under Section 149 of the Act - No merit in the appeal filed by the Revenue and reject the same.

Summary

Issues:
- Appeal filed by Revenue against refund claim allowed by Commissioner (Appeals).
- Validity of refund claim without challenging assessment order.
- Interpretation of legal provisions for refund claims under Customs Act.
- Correctness of assessing officer's duty liability quantification.
- Application of Section 154 of the Customs Act for correcting errors.

Analysis:
1. The appeal raised concerns about the respondents paying export duty without protest on consignments' FOB value. The appellant argued that not challenging the order under appeal precludes questioning it later for a refund. They cited precedents like Super Cassettes Industries Ltd. case. The Commissioner was urged to follow decisions in Aman Medical Products, Mac & Megha Agro Equipments, and Kerala Horticulture Development Programme cases. The appellant also invoked the Priya Blue Industries Ltd. judgment to emphasize the need for an order of assessment to be modified before a refund claim can be maintained.

2. The case records revealed that the respondents exported Iron Ore fines and paid excess export duty. The Assistant Commissioner assessed duty based on FOB value as transaction value, contrary to Circular No. 18/2008. The respondents filed a refund claim after the Circular's issuance, seeking a refund for the excess duty paid. The Assistant Commissioner rejected the claim, citing non-challenge of the assessment on the shipping bill and the Circular's inapplicability to finalized assessments.

3. The impugned order relied on case laws like IP Rings Ltd, Senka Carbon Pvt. Ltd., and Birla Jute Manufacturing Company Ltd. to allow the appeal. The Commissioner held that the refund claim could be corrected under Section 154 of the Act, despite the assessment not being challenged. The original authority's error in assessing duty based on FOB value as transaction value was highlighted, and the Commissioner deemed the excess duty claim as per law, allowing the refund.

4. The Apex Court's stance in Flock India Pvt. Ltd. case was referenced, emphasizing that failing to challenge an appealable order precludes later questioning via a refund claim. The Tribunal's decisions in Senka Carbon Pvt. Ltd. and VST Industries Ltd. cases supported correcting assessment errors and refunding excess amounts paid. The judgments in Aditya Birla Nuvo Ltd. and Hero Honda Motors Ltd. cases further emphasized the corrective power under Section 154 of the Act.

5. The impugned order aligned with various judicial authorities, including I.P. Rings Ltd. case, directing reassessment under Section 17(4) of the Act. The decision rejected the Revenue's appeal, finding consistency with legal precedents and upholding the refund claim. The judgment was pronounced on 19-5-2010.