2019 (2) TMI 1801 - AT - Customs

Refund of excess duty paid - duty paid under protest - the quantity which was received in the shore tank was lesser than the quantity which was reported in the ullage report of the ship - the appellant filed a bill of entry for the lesser quantity and was directed to pay duty on the entire quantity taking into account quantity in the ullage report as the total quantity received. The only ground on which the refund was sought to be rejected by the lower authority is that the imports were made prior to the acceptance of the judgment of Hon ble Supreme Court in the case of Mangalore Refinery Petrochemicals Limited 2015 (9) TMI 245 - SUPREME COURT and hence the refund is applicable from the date of pronouncement of the judgment i.e. 2-9-2015. HELD THAT - There are no force in the arguments by the lower authorities inasmuch as that once the judgment is pronounced by Hon ble Supreme Court, all adjudicating authorities are bound by the same. The Hon ble Supreme Court settled the legal position that in case of liquid cargo transferred to the shore tank, the shore tank quantity should be considered for determining the Customs duty and not the quantity mentioned in the ullage report. Thus, the appellants who were compelled to pay excess duty, are entitled to refund of the same under Section 27, along with applicable interest - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of excess Customs duty paid based on quantity discrepancy in shore tank and ullage report.

Analysis:
The appellant, an importer of various crude oils stored in shore tanks, filed refund claims for excess Customs duty paid due to a quantity discrepancy between the shore tank and the ullage report of the ship. The lower authority rejected the refund applications, citing that the imports were made before the acceptance of the Supreme Court judgment and Board circular stating that shore tank quantity should determine Customs duty. The appellant argued that the Supreme Court's decision should prevail over any Chief Commissioners' decision and that they are entitled to a refund based on the settled legal position.

The Tribunal considered both sides' arguments and the records. It noted that once the Supreme Court pronounces a judgment, all adjudicating authorities are bound by it. The Supreme Court had determined that for liquid cargo in shore tanks, the shore tank quantity should be used to calculate Customs duty, not the ullage report quantity. Therefore, the appellants, who had paid excess duty, were entitled to a refund under Section 27 along with applicable interest.

In the final order, the Tribunal set aside the lower authority's decisions and allowed the appeals, granting the appellants consequential reliefs. The judgment emphasized the binding nature of Supreme Court decisions on adjudicating authorities and upheld the appellants' right to a refund based on the settled legal position regarding Customs duty calculation for liquid cargo in shore tanks.