2018 (8) TMI 1026 - AT - Customs

Refund of excess duty paid - duty paid under protest - refund denied on the ground that on the date of filing of bill of entry i.e. 21.01.2013 the rate of customs duty was enhanced from 4% to 6% - effective date of N/N. 1/2013-Cus was issued in 21.01.2013 - Held that - Though the Notification No. 1/2013-Cus was issued in 21.01.2013 but the same was published in the Official Gazette and offered for sale on 04.02.2013. Therefore, as per Section 25(4)(b) of Customs Act, 1962, since the Notification was published and offered for sale on 04.02.2013, the same will be effective from that date only - Accordingly, on the date of filing bill of entry i.e. 21.01.2013, the old rate of 4% shall be applicable. The appellant was not liable to pay 2% excess duty, hence the same is refundable. However adjudicating authority, since rejected the claim mainly on the issue of effective date of notification, all the documents submitted by the appellant were not verified and also the aspect of unjust enrichment, limitation etc. also need to be examined - appeal allowed by way of remand.

Issues:
1. Effective date of Notification No. 1/2013-Cus for customs duty rate increase.
2. Applicability of customs duty rate on the date of filing the bill of entry.
3. Rejection of refund claim based on the effective date of the notification.
4. Verification of documents and unjust enrichment in the refund claim.

Analysis:

Issue 1 - Effective date of Notification No. 1/2013-Cus:
The case involved the interpretation of the effective date of Notification No. 1/2013-Cus, which increased the customs duty rate from 4% to 6%. The tribunal noted that although the notification was issued on 21.01.2013, it was published in the Official Gazette and offered for sale on 04.02.2013. Referring to Section 25(4)(b) of the Customs Act, 1962, the tribunal held that the notification would be effective from the date of publication and sale, i.e., 04.02.2013.

Issue 2 - Applicability of customs duty rate:
The appellant argued that since the notification was effective from 04.02.2013, the old rate of 4% should apply on the date of filing the bill of entry, which was 21.01.2013. The tribunal agreed with this argument, citing previous judgments and holding that the appellant was not liable to pay the excess 2% duty and that the same was refundable.

Issue 3 - Rejection of refund claim:
The refund claim was initially rejected based on the view that the notification was effective from 21.01.2013. The tribunal found this reasoning flawed and set aside the impugned order. It directed the adjudicating authority to process the refund claim in accordance with law, considering the correct effective date of the notification.

Issue 4 - Verification of documents and unjust enrichment:
The tribunal emphasized that the documents submitted by the appellant were not properly verified, and aspects such as unjust enrichment and limitation were not examined. Therefore, the tribunal allowed the appeal by remanding the case to the adjudicating authority for a thorough examination of the refund claim, including verification of documents and consideration of unjust enrichment.

In conclusion, the tribunal ruled in favor of the appellant, highlighting the correct effective date of the customs duty rate increase notification and directing a reevaluation of the refund claim with proper verification and examination of relevant aspects.

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