2008 (8) TMI 321 - AT - Customs

Refund of Customs Duty Whether assessment is to be treated as provisional assessment where the assessment of the goods to duty at concessional rate was subject to the condition that end-use certificate be produced within six months Held that The assessment of the goods to concessional rate of duty was, of course, subject to the condition (prescribed under the Notification) that the end-use certificate be produced within six months. However, the assessee did not take clearance of the goods for their own reasons and, consequently, the aforesaid condition became incapable of being complied with. where an assessee, by his own conduct, renders a condition attached to exemption notification unworkable or incapable of being complied with, he is precluded from pleading that the assessment was provisional by virtue of such condition. the assessment can not be held to be provisional refund application rejected on the ground of period of limitation upheld.

Summary

Issues: Refund claim under Section 27(1) of the Customs Act for imported heavy metal scrap; Applicability of limitation provisions under Section 27; Provisional assessment and abandonment of goods; Condonation of delay in refund claim.

Analysis:
1. The appellants imported heavy metal scrap and paid duty at a concessional rate under Customs Notification No. 23/98. They filed a refund claim under Section 27(1) of the Customs Act on the ground that the goods had been abandoned. The original authority rejected the claim as time-barred, which was upheld by the Commissioner (Appeals), leading to the present appeal.

2. The appellants argued that since the assessment was subject to the condition of producing an end-use certificate within six months, it should be deemed provisional, exempting it from the limitation provisions of Section 27. However, the tribunal held that the assessment was not provisional under Section 18 of the Customs Act. The appellants also contended that they were not liable to pay duty on abandoned goods, seeking a refund without reference to Section 27. The tribunal disagreed, stating that the limitation period is binding, citing Miles India Ltd. v. Assistant Collector of Customs [1987 (30) 641 (S.C.)].

3. The tribunal found that the appellants cannot avoid the application of Section 27 or its limitation provisions, as evidenced by their request for condonation of delay in the refund claim. The duty was paid on 3-3-1999, and the refund claim was filed well beyond the prescribed six-month period, making it time-barred. The Customs Act does not allow condonation of delay for refund claims, further supporting the dismissal of the appeal.

4. The tribunal clarified that the assessment being provisional or the goods being abandoned does not alter the legal position. Even though the assessment was subject to conditions, the appellants' failure to clear the goods rendered compliance impossible. Therefore, they cannot claim the assessment was provisional due to unmet conditions. Section 23(2) of the Customs Act addresses abandoned goods, stating the assessee is not liable to pay duty on such goods. However, the appellants had paid the duty assessed by the department, seeking a refund under Section 27, which is subject to the limitation provisions.

5. Ultimately, the tribunal upheld the impugned order, dismissing the appeal due to the time-barred nature of the refund claim and the binding nature of the limitation provisions under Section 27 of the Customs Act.