2014 (3) TMI 96 - HC - Customs

Refund of customs duty - classification dispute goes in favor of assessee - Import of Reach Stackers - Classification as material handling equipment or vehicles - Exemption under Customs Notification No.92/2004 Cus - Served From India Scheme (SFIS) - Held that - petitioner is justified in making a grievance against the inaction on the part of the respondentsauthorities in not processing the petitioner s refund application, in spite of the fact that the Commissioner of Customs (Appeals) has accepted the petitioner s claim for benefits of exemption notification No.92/2004. In view of the above the petitioner is entitled to utilise the SFIS scrip to pay the dut of customs. When the Tribunal has dismissed the stay application of the revenue, the petitioner is entitled to get benefits of the appellate order, more particularly when the petitioner s case is already covered by the decision of this Court in Ranadip Shipping & Transport Co.Pvt.Ltd. (1989 (3) TMI 136 - HIGH COURT OF JUDICATURE AT BOMBAY). Observations made by the Apex Court in Union of India v/s. Kamlakshi Finance Corporation Ltd. 1991 (9) TMI 72 - SUPREME COURT OF INDIA in similar circumstances are squarely applicable to the present case also as, ....The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not acceptable to the departmentin itself an objectionable phraseand is the subjectmatter of an appeal can furnished no ground for not following it unless its operation has been suspended by a competent Court. Revenue directed to process the refund application as expeditiously as possible - Decided in favor of assessee.

Summary

Issues: Classification of goods for customs duty exemption under Customs Notification, Refund of customs duty, Inaction by revenue authorities, Writ of mandamus.

Classification of Goods for Customs Duty Exemption: The petitioner, engaged in maritime transport services, filed a Bill of Entry for clearance of "Reach Stacker" under the SFIS. The Asst. Commissioner rejected the claim, considering Reach Stackers as vehicles. However, the Commissioner of Customs (Appeals) accepted the petitioner's contention that Reach Stackers are not vehicles but material handling equipment, eligible for customs duty exemption under Notification No.92/2004Cus.

Refund of Customs Duty: Following the appellate authority's decision, the petitioner applied for a refund of customs duty paid earlier. The revenue appealed to the Tribunal, which dismissed the stay application. Despite this, the Asst. Commissioner did not process the refund application due to the pending appeal, causing delay and inaction.

Inaction by Revenue Authorities: The petitioner sought a writ of mandamus to direct the Asst. Commissioner to accept and process the refund application. The respondents opposed, citing difficulty in recovering if the revenue's appeal succeeded. The Court held that the petitioner was entitled to the benefit of the appellate order and criticized the inaction of the revenue authorities in processing the refund application.

Writ of Mandamus: The Court allowed the writ petition, directing the Asst. Commissioner to expedite processing the petitioner's refund application within four weeks. The decision emphasized the importance of revenue officers following appellate authorities' orders to avoid harassment to assessees and ensure the orderly administration of tax laws, citing a relevant precedent from Union of India v/s. Kamlakshi Finance Corporation Ltd. (1991).