2018 (9) TMI 767 - HC - Customs

100% EOU - Refund of excess Export Duty paid - duty was paid under protest - Held that - Admittedly the petitioner has paid the duty under protest @ 10%. But the appropriate duty would be 5% from 1-3-2013 vide Notification No. 15/2013-Cus. dated 1-3-2013 and 2.5% from 1-3-2015 vide Notification No. 8/2015-Cus. dated 1-3-2015 - 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 - petition allowed.

Summary

Issues:
1. Classification of exported ilmenite under Customs Tariff Act, 1975.
2. Refund claim for excess export duty paid under protest.
3. Entitlement to refund based on a decision of the Tribunal.
4. Legality of the impugned order by the second respondent.
5. Provision of immovable property security for the refund amount.

Classification Issue:
The petitioner, a 100% Export Orient Unit, exported processed and upgraded ilmenite, seeking to pay 5% export duty under CTH 2614 00 20. However, the Department demanded 10% duty. The Tribunal in a similar case held that ilmenite falls under CH 2614 00 20, not subject to 10% duty. The High Court emphasized that decisions of higher forums are binding, entitling the petitioner to the correct duty rate.

Refund Claim Issue:
The petitioner paid duty under protest at 10%, though the correct rate was 5% from 1-3-2013. The Court reiterated that payment under protest entitles refund if duty was not leviable. Filing an appeal is not a prerequisite for claiming a refund, especially when a higher forum's decision supports the claim.

Entitlement to Refund Issue:
Based on the Tribunal's decision, the petitioner deserved a refund. The Court highlighted the duty of the Adjudicating Authority to follow binding decisions, allowing the petitioner's refund claim without further appeals.

Legality of Impugned Order Issue:
The Court quashed the second respondent's order denying the refund, emphasizing the petitioner's entitlement based on the Tribunal's decision and the duty paid under protest.

Security Provision Issue:
The petitioner offered immovable property security for the refund amount, to be held until the Supreme Court's final decision. The Court directed the second respondent to refund the amount within four weeks, taking the provided security into account.

In conclusion, the High Court allowed the Writ Petition, ordering the refund of the excess duty paid under protest and providing clear directives for the refund process, emphasizing the binding nature of higher forum decisions and the entitlement to refunds in such cases.