2018 (9) TMI 592 - HC - Customs

100% EOU - Refund claim - excess export Duty paid under protest. Held that - It is well-settled that the duty paid by the assessee under protest, if ultimately found, was not leviable, it would automatically entitle him for refund. The payment under protest by itself would tantamount to claiming refund, but, it cannot be turned down merely because he has not filed any appeal or appeal was filed by the Department before a higher forum - the petitioner is entitled to get refund. Since a binding decision has not been followed by the Adjudicating Authority in this case, this Court can interfere straight away without relegating the assessee to file an appeal. Petition allowed.

Summary

Issues:
Classification of ilmenite for export duty - 5% or 10%?
Refund claim for excess export duty paid under protest.

Analysis:
1. Classification of Ilmenite for Export Duty:
The petitioner, a 100% Export Orient Unit, claimed their processed and upgraded ilmenite fell under CTH 2614 00 20, warranting a 5% export duty. However, the Department demanded a 10% duty. The Tribunal's decision in V.V. Minerals v. Commissioner of Customs, Tuticorin, confirmed that ilmenite was classifiable under CH2614 00 20 of CTH, supporting the petitioner's classification. The Court noted that the duty should have been 5% from 1-3-2013 and 2.5% from 1-3-2015, as per relevant notifications. The payment under protest automatically entitled the petitioner to a refund if the duty was found to be unjustified.

2. Refund Claim for Excess Export Duty:
The petitioner sought a refund for the excess duty paid under protest, which the Department rejected, citing a pending appeal to the Supreme Court challenging the Tribunal's decision. The Court emphasized that the Tribunal's decision was binding, entitling the petitioner to a refund. The Court highlighted that the payment under protest itself constituted a claim for a refund, regardless of whether an appeal had been filed. Referring to a similar case, the Court emphasized that the Adjudicating Authority's failure to follow a binding decision warranted immediate intervention without requiring the petitioner to file an appeal.

3. Court's Decision:
Based on the Tribunal's decision and the petitioner's entitlement to a refund, the Court quashed the impugned order by the Department. The petitioner offered immovable property security for the refund amount, to be held until the Supreme Court's final decision. The Court directed the Department to refund the amount within four weeks of the order, after securing the immovable property. The Writ Petition was allowed, with no costs, and related petitions were closed.

In conclusion, the judgment resolved the issue of ilmenite classification for export duty in favor of the petitioner, emphasizing their right to a refund for excess duty paid under protest, based on the Tribunal's decision and legal principles governing such situations.