2017 (8) TMI 629 - HC - Customs

Refund claim - amount of exemption not claimed - rejection of refund on the ground of non-filing of appeal against the bills of entry which had subsequent attained finality - Held that - the record is clear that the competent officer though obliged to take heed of the prevailing situation i.e. exemption notification which entitled the assessee to clear the goods without payment of duty upon being pointed out the assessee is entitled to the refund of the amount given that the amounts could not have been collected lawfully in the first place - refund cannot be denied - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Claim of refund by the importer based on exemption notification.
2. Rejection of refund claim by Deputy Commissioner.
3. Appellate Commissioner's decision on refund claim.
4. Legal interpretation regarding duty payment and refund claim.
5. Appeal by Revenue against the High Court's judgment.

Analysis:

Issue 1: The importer claimed a refund based on an exemption notification for eight consignments of ferrite magnets imported without initially claiming exemption. The competent officer assessed duty despite the exemption notification in place.

Issue 2: The Deputy Commissioner rejected the refund claim on the grounds of non-challenge of bills of entry by the importer. However, the Appellate Commissioner allowed the appeal, citing relevant legal precedents.

Issue 3: The Appellate Commissioner's decision was based on a judgment by the High Court, which considered a Supreme Court decision. The High Court held that if duty was paid without an assessment order and no legal dispute was pending, the refund claim could not be rejected solely due to non-appeal against the bills of entry.

Issue 4: The High Court reiterated that the duty collected unlawfully should be refunded to the importer, as the competent officer failed to consider the exemption notification. The Court found the CESTAT's order supporting the refund claim to be valid, dismissing any substantial legal questions raised.

Issue 5: The Revenue appealed against the High Court's judgment, arguing that the decision was not final. However, the High Court upheld the refund claim, emphasizing the importer's entitlement to the refund due to the duty being collected unlawfully. The appeal by the Revenue was subsequently dismissed.