2008 (9) TMI 197 - AT - Customs

Appellant paid higher duty on account of a glitch in the EDI system change of duty from 10% to 5% - such change was not incorporated in the system, as a result of which the rate of duty indicated was 10% instead of 5% - held that, Revenue in not correct in retaining the excess duty and reject the refund claim on the ground that the assessment has not been challenged - verification can be done whether the duty change was not incorporated in the EDI system - appeal is allowed by way of remand

Summary

Issues:
Refund claim based on higher duty payment due to EDI system glitch.

Analysis:
The appeal was filed against Order-in-Appeal No. 65/2008 passed by the Commissioner of Customs (Appeals), Bangalore. The appellants imported goods under seven bills of entry and paid duty at 10% despite the effective rate being 5% as per Notification No. 20/2007-Cus. The appellant sought a refund of the excess Excise Duty paid on 19-12-2007. The Assistant Commissioner directed the appellant to appeal before the Commissioner of Customs (Appeals) as the assessments had been finalized and not challenged. The Commissioner (A) upheld the rejection of the refund claim citing the decision in the case of M/s. Priya Blue Industries Ltd. v. CC (Preventive), where it was held that duty is payable as per the assessment order unless reviewed or modified in appeal.

The appellant argued that the higher duty was paid due to a glitch in the EDI system, resulting in the system showing 10% duty instead of 5%. This situation was compared to the case of ISRO Satellite Centre v. CC (A), Bangalore. The departmental representative contended that there was no evidence of EDI problems causing the higher duty payment and supported the decision of the lower authorities. It was noted that the appellant did not raise this issue before the lower authorities or in the refund application.

Upon careful consideration, the Tribunal found that if the higher duty was paid due to a clerical error, Section 154 of the Customs Act allows for correction of such mistakes. It was deemed unjust for the Revenue to retain the excess duty and reject the refund claim solely on the grounds of unchallenged assessment. The matter was remanded to the Original Authority for verification on whether the duty change was not reflected in the EDI system during the relevant period. The Original Authority was directed to decide the refund claim within three months from the date of the order.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal by remanding the matter to the Original Authority for further review and decision within a specified timeframe.