2016 (11) TMI 337 - AT - Customs

Refund of additional duty of customs (ADC) - misconception of authority - Held that - The authority is a creature of the statute to carry out the object thereof. He is expected to make the verification of the claim from grass root materials in accordance with law without simply acting on the basis of Chartered Accountant s certificate. If he simply relies on third party evidence without carrying out his duty under law, there will be only empty formality followed to act in excess of exercise of the power which is not conferred on him. Therefore, the authority should act only within the parameters of law and carry out the object of the statute without any extraneous conditions imposed by him. Public confidence on law and statutory authority should not be shaken - appeal remanded to the Commissioner (Appeals) to dispose the matter in accordance with law within the time stipulated.

Summary

Issues:
Refusal of refund by Commissioner (Appeals) based on extraneous grounds not supported by law, requirement of board resolution and Chartered Accountant's appointment letter for grant of refund of additional duty of customs (ADC), authority's duty to verify claims in accordance with law, need for statutory authority to act within legal parameters, remand of appeals for readjudication by Commissioner (Appeals), public confidence in law and statutory authority, simplification of refund procedure and removal of bottlenecks in grant of refunds.

Analysis:
The judgment addresses the issue of the Commissioner (Appeals) denying the appellant's refund based on extraneous grounds not supported by law. The Commissioner required the appellant to submit a board resolution for scrutiny to grant the refund of additional duty of customs (ADC), which is not a legal requirement. Additionally, the Commissioner also expected the appellant to provide the Chartered Accountant's appointment letter, which was deemed as a misconception by the Tribunal. The Tribunal emphasized that the authority should not create its own jurisdiction without legal backing and remanded the matter back to the Commissioner (Appeals) for readjudication by a specified date, following the observation of the Hon'ble High Court of Madras in a relevant case.

The judgment further delves into the role of the authority as a creature of the statute and the expectation for the authority to verify claims from primary sources in accordance with the law. It highlights that relying solely on third-party evidence, such as a Chartered Accountant's certificate, without fulfilling the duty under the law, would amount to an excessive exercise of power not conferred by law. The Tribunal emphasized the importance of the authority acting within the legal parameters and fulfilling the objectives of the statute without imposing extraneous conditions, as it could shake public confidence in the law and the statutory authority.

Concluding the analysis, the Tribunal remanded both appeals to the Commissioner (Appeals) with specific directions to dispose of the matter in accordance with the law within the stipulated time. The judgment also instructed the Registry to send a copy of the order to the Chairman, CBE&C, to simplify the refund procedure and eliminate bottlenecks in the system of granting refunds. This directive aimed to ensure that subordinates respect the law, thereby enhancing public confidence in the legal system and the statutory authority.