2011 (4) TMI 719 - AT - Customs

Refund - recovery of duty twice from the appellant and from the customers of the appellant - the appellants filed a refund claim for refund of Rs.5,21,98,021/- paid by them. The DRI has on a query stated that the impugned amount was deposited voluntarily by the appellants on behalf of their customers, that the show cause notice is yet to be issued and the case to be adjudicated. In view of the present situation, the refund claim was rejected stating that the same is premature. - held that - It can be seen from the above reproduced portions of the judgments that the amounts which is not due from the assessee needs to be refunded back, but, the interest of revenue is to be kept in mind is the law. In the case in hand before us, we find that the revenue authorities have collected the amount of differential duty along with interest from the importers, which itself secures the revenue s interest in respect of alleged differential duty liable to be paid on alleged undervaluation of the CDs by the importers. The amount paid by the appellant being amount deposited by him towards the very same duty which has been again collected by the revenue authorities from the importers, cannot be retained by the revenue, as there is no show cause notice issued to the appellant holding him as an importer and that he is liable to pay said duty. In the absence of any such show cause notice to the appellant holding him as an importer, holding back of the amount collected from him either under force or paid voluntarily, cannot be considered as an amount which need to be appropriated against the proposed penalties. - Decided in favour of the assessee

Summary

Issues Involved:
1. Whether the refund claim filed by the appellant is premature.
2. Whether the appellant is liable for the customs duty or penalty.
3. Whether the amount paid by the appellant should be refunded.
4. Whether the appellant is entitled to interest for the delayed refund.

Issue-wise Detailed Analysis:

1. Whether the refund claim filed by the appellant is premature:
The appellant contended that the refund claim was not premature as they had paid the amount under protest, which was not due from them. The lower authorities rejected the refund claim stating it was premature because the adjudication process was still ongoing. The Tribunal found that the amount paid by the appellant could not be held in abeyance for appropriation towards any penalty that had been proposed but not yet imposed. The Tribunal concluded that the refund claim was not premature and set aside the impugned order.

2. Whether the appellant is liable for the customs duty or penalty:
The appellant argued that they were not the importers of the CDs containing SAP ERP software; their customers were. The Tribunal noted that the revenue authorities had issued show cause notices to the appellant's customers, indicating that the customers were considered the importers. The Tribunal found that the appellant was not liable for customs duty as they were not the importers. The amount paid by the appellant was towards the differential duty, which had already been collected from the importers. Therefore, the appellant could not be held liable for the duty or penalty.

3. Whether the amount paid by the appellant should be refunded:
The appellant had paid Rs.5,21,98,021/- under protest to safeguard their business interests. The Tribunal observed that the revenue authorities had already collected the differential duty from the importers, securing the revenue's interest. Citing various judgments, the Tribunal held that amounts not due from the assessee should be refunded. Since the revenue had collected the duty from the importers, the amount paid by the appellant should be refunded as there was no show cause notice holding the appellant as an importer liable to pay the duty.

4. Whether the appellant is entitled to interest for the delayed refund:
The appellant claimed interest for the delayed refund, citing several judgments. The Tribunal did not explicitly address the interest issue in the detailed analysis but implied that the appellant was entitled to consequential relief, which typically includes interest on delayed refunds. The Tribunal's decision to allow the appeal with consequential relief suggests that the appellant would be entitled to interest on the refunded amount.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal with consequential relief. The refund claim was not premature, the appellant was not liable for the customs duty or penalty, and the amount paid by the appellant should be refunded. The decision implies that the appellant is also entitled to interest for the delayed refund.