2018 (9) TMI 764 - AT - Customs

Refund of Differential duty paid by exporter - finalization of provisional assessment - Held that - The duty was paid at the higher rate but the assessment was made subject to the outcome of the test reports of the chemical examiner. In fact, if the chemical examiner s report had shown that the Fe content in the iron ore was higher than 62% then no refund would have arisen as a consequence. Thus, it can be said that the assessment was made provisionally by the assessing officer, although the word provisionally assessed was not mentioned on the face of the shipping bill. If the assessment is taken to be final, the calculation of the duty is certainly wrong because the rate of duty on iron ore with Fe content less than 62% was only ₹ 50/MT and not ₹ 300/MT. It was the responsibility of the assessing officer to correctly assess the export duty payable and he made a mistake. The customs officers are well within their powers to correct these mistakes under Sec.154 of the Customs Act. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Challenge to the refund sanctioned by the Asst. Commissioner without challenging the assessment.
2. Interpretation of Sec.154 of the Customs Act regarding correction of clerical or arithmetic mistakes in the assessment.
3. Duty calculation discrepancy due to provisional assessment and correction under Sec.154.
4. Validity of the Asst. Commissioner's amendment of the shipping bill under Sec.154 and the subsequent refund.

Analysis:
1. The appeal was filed by the Revenue against an Order-in-Appeal regarding the export of iron ore fines with differing Fe content and duty rates. Despite no appearance by the respondent, the case was heard based on records. The initial assessment was subject to a chemical examiner's report, leading to a rectification of the error in the shipping bill by the Asst. Commissioner, who sanctioned a refund of the differential duty paid by the exporter.

2. The Revenue contended that the assessment should have been challenged before claiming a refund, citing a Supreme Court ruling. However, the absence of an endorsement on the shipping bill regarding the concessional rate or protest payment made the assessment final. The Asst. Commissioner's refund sanction and the first appellate authority's decision were challenged on these grounds.

3. The departmental representative argued that without challenging the assessment, the refund should not have been granted. The discrepancy between the declared Fe content and the duty paid at a higher rate was highlighted. The provisional nature of the assessment, pending the chemical examiner's report, was emphasized.

4. The Tribunal examined the case records and noted that while the assessment was not reopened, Sec.154 empowered officers to correct mistakes. The provisional assessment nature was acknowledged, and the duty calculation error was attributed to the assessing officer. The Asst. Commissioner's amendment under Sec.154 to rectify the duty rate was deemed valid, and the appeal by the Revenue was rejected, upholding the lower authorities' decisions.

This detailed analysis of the judgment addresses the issues raised in the appeal, the legal interpretation of Sec.154 of the Customs Act, and the correction of duty calculation discrepancies in the assessment process.