2018 (11) TMI 987 - AT - Customs

Refund of Export duty - shipping bill which was assessed was not challenged - rejection of refund on the ground that shipping bills filed by the appellants reached finality and since there is no appeal against such order, refund claims are not maintainable - Held that - The issue regarding the refund claims filed on the ground that the shipping bill which was assessed was not challenged on similar issue came before the Bench in the case of CCCE & ST, Guntur vs. Ashapura Minechem Limited 2018 (9) TMI 764 - CESTAT HYDERABAD , where it was held that 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. Thus, the adjudicating authority has correctly sanctioned the refund since the shipping bill was assessed and export duty paid subject to output of the Dy. Chief Chemist s report, has to be held as being provisional when the duty was paid and subsequently finalized which resulted in refund - the orders of both the lower authorities are correct - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund claims on iron ore fines export through Krishnapatnam Port; Rejection of refund claims based on finality of shipping bills assessment; Provisional assessment based on Dy. Chief Chemist report; Dispute over export duty rates; Correct application of Section 154 of the Customs Act.

Analysis:
1. The appeals addressed the common issue of refund claims by respondents for iron ore fines exported through Krishnapatnam Port. The contention arose in appeal numbers C/289/2009, C/290/2009, and C/428/2009 where refund claims faced rejection due to finalized shipping bill assessments without any appeal against them. However, the adjudicating authority allowed the refund claims under Section 154 of the Customs Act, assessing the consignments' iron ore content below 62% Fe and liable for export duty at ?50/- per MT, a decision upheld by the first appellate authority.

2. In contrast, appeal numbers C/228/2009 and C/259/2009 involved refund claims supported by the Dy. Chief Chemist report on iron ore content, leading to the allowance of refund claims by both the adjudicating authority and the first appellate authority, despite opposition from Revenue authorities.

3. The crux of the Revenue's argument revolved around the challenge to refund claims based on the assessed iron ore content affecting the applicable export duty rates. The dispute arose from the duty paid at ?300/- per MT, while the shipping bills remained unchallenged, questioning the validity of seeking refunds for duty overpayments.

4. The Tribunal referred to a previous case, CCCE & ST, Guntur vs. Ashapura Minechem Limited, where it was established that under Section 154 of the Customs Act, officers could rectify mistakes in assessments. The provisional nature of the assessments, subject to chemical examiner reports, justified corrections to duty rates, as evidenced by the Dy. Chief Chemist's findings impacting the final duty payable.

5. The Tribunal concluded that the correctness of the refund sanctioning in appeal numbers C/228/2009 and C/259/2009 was justified, considering the provisional assessment based on the Dy. Chief Chemist report, leading to the correct application of export duty rates and subsequent refunds. Therefore, the impugned orders across all appeals were deemed legally sound and rejected, maintaining the lower authorities' decisions.

6. In summary, the Tribunal upheld the refund claims based on provisional assessments and correct application of duty rates, emphasizing the authority's power under Section 154 of the Customs Act to rectify assessment errors, ultimately resulting in the rejection of the appeals and affirmation of the lower authorities' orders.