2017 (11) TMI 407 - AT - Customs

Refund of excess duty paid - whether the First Appellate Authority was correct in sanctioning the refund of the excess amount of export duty paid by the respondent or otherwise? - Held that - the Revenue has not contested the applicability of Section 27(2) of the Customs Act, 1962 in respect of the duties of export. In my view, provisions of Section 27(2) will not apply to the export duty - appeal dismissed - decided against appellant.

Summary

Issues:
1. Whether the First Appellate Authority was correct in sanctioning the refund of the excess amount of export duty paid by the respondent.

Analysis:
The appeal before the Appellate Tribunal CESTAT Bangalore involved the issue of refunding excess export duty paid by the respondent. The respondent had exported iron ore fines and paid duty at a higher rate initially, later realizing a lower duty rate was applicable. The adjudicating authority initially credited the refund to the Consumer Welfare Fund, prompting an appeal. The First Appellate Authority directed the refund to the respondent, leading to the appeal by the Revenue. The Revenue contended that the duty incidence had been passed on to the buyer and that the exporter failed to prove otherwise. They argued that the exporter's reliance on the sales contract did not negate the duty passing on to the buyer. The Revenue also highlighted the absence of the Bank Realisation Certificate as crucial evidence.

The respondent's counsel argued that specific provisions of the Customs Act did not preclude the refund of export duty, citing relevant case law to support their position. The Appellate Tribunal, after considering the submissions, upheld the First Appellate Authority's decision to set aside the original order and grant the refund. The Tribunal emphasized the need for evidence to prove fulfillment of contract terms and the logic behind duty being based on quantity, not sale price. They agreed that the duty rate applicable at the time of export should govern the refund decision. The Tribunal found merit in the respondent's arguments and rejected the Revenue's contentions regarding duty passing on to the buyer.

The Tribunal also addressed the applicability of Section 27(2) of the Customs Act to export duties, citing a relevant case to support their interpretation. Ultimately, the Tribunal held that the impugned order was legally sound and dismissed the appeal, affirming the refund of the excess duty to the respondent. The judgment provided a detailed analysis of the legal provisions, case law, and factual circumstances to support the decision, ensuring a comprehensive review of the issues involved.