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2017 (10) TMI 304 - AT - CustomsRefund of CVD paid - CVD paid under protest - Held that - when amount collected as CVD, which was not due and for which exemption N/N. 10/2006 dated 1.3.2006 was available, it is to be termed as the tax collected without the authority of law. Factually, there is no dispute that the goods imported by the appellant are eligible for the benefit under N/N. 10/2006 dated 1.3.2006 - The Constitution of India does not permit the State to collect any tax which is not authorized by law. Article 265 of Constitution of India clearly says that Taxes not to be imposed save by authority of law No tax shall be levied or collected except by authority of law. The Hon ble Supreme Court in the case of Salonah Tea Co. Ltd. vs. Superintendent of Taxes, Nowgong & Ors. 1987 (12) TMI 3 - SUPREME Court clearly held that a taxing authority has no authority to retain the money collected without the authority of law and, as such, is liable to refund the same. Refund allowed - appeal allowed - decided in favor of appellant.
Issues: Appeal against rejection of refund claim of duty paid under protest for imported goods classified under Customs Tariff, eligibility for exemption under Notification No.10/2006, maintainability of refund claim without challenging assessment order, authority to collect tax under the Constitution of India.
Analysis: 1. Refund Claim Rejection: M/s. TTK Prestige Pvt. Ltd. appealed against the rejection of their refund claim amounting to ?17,72,942/- for duty paid under protest for imported aluminum nonstick cookware. The appellant imported the goods classified under Chapter Heading 7615920 of Customs Tariff and paid the total duty without claiming any exemption initially. The refund was sought based on Central Excise Notification No.3/2005 as amended by Notification No.7/2006. The Order-in-Original and Order-in-Appeal both rejected the refund claim, leading to the appeal before the Tribunal. 2. Appellant's Pleadings: The appellant argued that they paid the duty under protest due to system issues preventing the data related to exemption under Notification No.10/2006 from being accepted during clearance. They contended that the exemption under the said notification was unconditional, and the duty should not have been collected. Citing legal precedents like Aman Medical Products Ltd. vs. CC, Aditya Birla Nuvo Limitd vs. CC, and Indian Institute of Science vs. CC, the appellant sought a refund based on the improper collection of duty. 3. Revenue's Argument: The Revenue contended that the refund claim was not maintainable without challenging the assessment order, as per the Supreme Court's decision in Priya Blue Industries Ltd. vs. CC. They argued that when the assessment on the Bill of Entry is not challenged, a refund is not admissible, supported by the Tribunal's decision in Indian Potash Ltd. vs. CC, Kandla. 4. Legal Analysis: The Tribunal analyzed the case considering the tax collected without the authority of law, emphasizing that the Constitution prohibits the collection of any tax not authorized by law. Referring to the decision in Salonah Tea Co. Ltd. vs. Superintendent of Taxes, the Tribunal held that the taxing authority must refund money collected without legal authority. They also cited the Delhi High Court's decision in Aman Medical Products Ltd. vs. CCE, highlighting the right to file a refund claim even without challenging the assessed Bill of Entry when there is no dispute at the time of duty payment. 5. Judgment: The Tribunal concluded that the refund claim was maintainable under Section 27 of the Customs Act, and the non-filing of an appeal against the assessed Bill of Entry did not deprive the appellant of their right to claim a refund. Relying on legal precedents, the Tribunal set aside the impugned order and allowed the appeal with consequential relief to the appellant. In summary, the Tribunal upheld the appellant's refund claim, emphasizing the legality of tax collection and the right to seek a refund even without challenging the assessment order in certain circumstances.
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