2017 (9) TMI 1335 - AT - Customs

Refund claim - amount paid under the first bill of entry - amendments in the first bill of entry by rectifying the mistake - rejection of refund claim on the ground of time limitation - Held that - there is no taxable event i.e., import of goods into India relatable to the first advance bill of entry and as such, the deposits made by the appellants, under the advance bill of entry cannot acquire the characteristics of duty of Customs. The same would remain only a deposit with the Revenue. If the said deposits do not adopt the nature of duty, the provisions of section 27(1) would not get attracted. The Hon ble Gujarat High Court in the case of Swastik Sanitarywares Ltd. Vs Union of India 2012 (11) TMI 149 - GUJARAT HIGH COURT has held that second-time deposit of the same amount on clearance of the same goods did not amount to deposit of excise duty and was a pure mistaken deposit of the amount with the department which the Revenue cannot retain or withhold. Such claims would not fall under section 11B of the Central Excise Act - Admittedly, the filing of advance bill of entry with deposit of duty amount, did not materialize inasmuch as, on account of some mistake in respect of bill of lading, the goods were not cleared against the said bill of entry. As such, it can be successfully concluded that no event of import took place so as to fix the duty liability against the importer. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim rejected as barred by limitation under section 27(1) of the Customs Act, 1962.

Detailed Analysis:
The appellant, engaged in trading specific granules, purchased Linear Low Density Polyethylene granules on high-sea sale basis. Due to a mistake by the Customs House Agent (CHA) in mentioning the wrong bill of lading in the first bill of entry, a subsequent bill of entry was filed, and goods were cleared under it by paying duty. The appellant sought a refund for the duty paid under the first bill of entry, which was rejected on the grounds of limitation under section 27(1) of the Customs Act, 1962. The original adjudicating authority and the Commissioner (Appeals) upheld the rejection, leading to the present appeal.

The Tribunal noted that no dispute existed regarding the duty deposit at the time of filing the first bill of entry, even though no goods were imported against it. Upon the arrival of the goods, a fresh bill of entry was filed, and duty was paid for clearance. The Tribunal agreed that since no taxable event occurred regarding the import of goods under the first bill of entry, the deposits made by the appellant could not be considered as duty of Customs. Consequently, the provisions of section 27(1) would not apply in this scenario.

Citing a judgment by the Hon'ble Gujarat High Court in a similar case, the Tribunal emphasized that the second-time deposit of the same amount on clearance of the same goods did not constitute excise duty but was a mistaken deposit that the Revenue cannot retain. As the filing of the advance bill of entry did not result in goods clearance due to a mistake, it was concluded that no import event occurred to establish duty liability. Therefore, the deposit remained a "simple deposit" and was not subject to the limitation under section 27 of the Act.

Additionally, the Tribunal highlighted that the Revenue could have allowed the appellant to rectify the initial bill of entry, which would have avoided the need for a second bill of entry and a repeat duty deposit. Ultimately, it was determined that the importer should only pay duty once for the imported goods, and since the first deposit did not constitute Customs duty, it should be returned to the appellant without considering the limitation issue.

In conclusion, the Tribunal set aside the previous order, allowing the appeal and granting consequential relief to the appellants.