2016 (5) TMI 441 - AT - Customs

Refund claim - Import of water dispensers - Adjudicating authority in his order in original, had clearly stated that the appellant had paid excess duty and the entry 8418 covered only refrigerators and not water dispensers is an unassailable finding . The Adjudicating Authority had passed a reasoned and speaking order and in the first order passed by the Ld. Commissioner (Appeals) in order, directed the Adjudicating Authority to consider the issue in terms of Section 27 of the Customs Act, which was also upheld by the Tribunal. Held that - the Assistant Commissioner in his order, had no other option except to decide the refund application. Based on such an order, the Assistant Commissioner has granted relief. The impugned order cannot be sustained for the reason that the Ld. Commissioner (Appeals) has merely stated that the appellant has not challenged the assessment. In the absence of any ground on merit, that the classification arrived at by the Adjudicating Authority is erroneous, which has not been done in the instant case, the impugned order is liable to be set aside and the order passed by the Original Authority granting refund is restored. - Decided in favour of appellant

Issues involved:
1. Jurisdiction of the Adjudicating Authority in rejecting the refund claim.
2. Admissibility of refund under Section 27 of the Customs Act, 1962.
3. Classification of imported items under Notification No. 2/2006 (CE).
4. Validity of the order passed by the Commissioner of Customs (Appeals) regarding refund claim.

Issue 1: Jurisdiction of the Adjudicating Authority
The appellant imported water dispensers and claimed a refund on the grounds that the items did not attract RSP assessment as per Notification 13/02 NT CE. Initially, the claim was rejected by the A.C (Refunds) citing jurisdictional issues. Subsequently, the Adjudicating Authority rejected the refund claim without delving into the merits of the case. The Commissioner of Customs (Appeals) set aside the Adjudicating Authority's order, directing a determination of the refund's admissibility under Section 27 of the Customs Act, 1962. The Tribunal upheld this decision, emphasizing the need for a fair hearing and consideration of all contentions before passing a speaking order.

Issue 2: Admissibility of refund under Section 27 of the Customs Act
Following the Tribunal's order, the Assistant Commissioner of Customs (Refunds) acknowledged the excess duty payment by the appellant for the imported water dispensers. The Adjudicating Authority determined that the items should be assessed based on the assessable value for calculating CVD, resulting in an excess duty payment refundable to the appellants. Despite the department's appeal, the Ld. Commissioner (Appeals) emphasized that without challenging the assessment, a refund claim cannot be sustained. The appellant contested this, highlighting the previous order's direction to determine the refund's admissibility under Section 27. The Tribunal concluded that the Adjudicating Authority's reasoned order on excess duty payment warranted the refund, setting aside the Ld. Commissioner (Appeals)'s decision due to lack of merit in challenging the assessment.

Issue 3: Classification under Notification No. 2/2006 (CE)
The Adjudicating Authority clarified that only refrigerators were covered under heading 8418, not the imported water dispensers. A Chartered Accountant's Certificate verified the excess payment, which was not passed on to customers. The authority sanctioned the refund, leading to a departmental appeal. The Ld. Commissioner (Appeals) contended that without challenging the assessment, the refund sanction was erroneous. The appellant argued that the impugned goods were classifiable without invoking Notification 2/2006, emphasizing the correctness of the refund granted. The Tribunal upheld the Adjudicating Authority's classification decision and the refund granted, setting aside the Ld. Commissioner (Appeals)'s order.

Issue 4: Validity of the Commissioner of Customs (Appeals) order
The appellant challenged the reversal of the refund order by the Ld. Commissioner (Appeals), citing the previous direction to determine refund admissibility under Section 27. The revenue contended that without challenging the assessment, a refund claim cannot be upheld. The Tribunal reviewed the Adjudicating Authority's clear findings on excess duty payment and upheld the refund grant, overturning the Ld. Commissioner (Appeals)'s decision lacking merit in challenging the assessment.

In conclusion, the Tribunal's judgment emphasized fair consideration, adherence to legal provisions, and the necessity of challenging assessments for refund claims, ultimately upholding the Adjudicating Authority's decision to grant the refund based on the excess duty payment for the imported water dispensers.

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