2019 (4) TMI 496 - HC - Customs

Interpretation of statute - Power of refund authority to rectify error committed by the importer - Section 154 of the Customs Act, 1962 - Held that - With regard to the power under Section 154 of the Act, the first appellate authority held that unless the error is committed by the Department, the same cannot be rectified. The assessee filed appeal before the Tribunal. The Tribunal after considering the submissions made by the assessee and the Revenue, took note of Section 154 of the Act, the decision of the Delhi Tribunal in the case of Cannon India Pvt. Ltd., vs. CC, 2006 (2) TMI 396 - CESTAT, NEW DELHI , the decision of the Mumbai Tribunal in the case of Goa Shipyard vs. CC., ACC Sahar, 2005 (8) TMI 277 - CESTAT, MUMBAI and held that clerical error or arithmetical error could be rectified suo motu under Section 154 of the Act and refund could be allowed to importer as a consequence of correction of clerical error under Section 154 of the Act, when the importer had not filed refund claim under Section 27 of the Act. A reading of Section 154 of the Act gives us an impression that clerical or arithmetical error which has occurred in orders passed by the Government Board or any officers of that Department, or errors arising from such order due to accidental slip or omission alone can be corrected. However, what is to be borne in mind is the procedure prescribed for amendment of bills of entry or for amendment of export documents which are documents originating from the exporter or importer. However, so far as the orders to be passed under the provisions of the Act is concerned, the power to correct the same can vest only with the authorities. Therefore, Section 154 of the Act specifically deals with such a power. In the instant case, the assessee cannot correct the order, but the fact remains, an invoice which did not form part of the bill of entry was inadvertently included, assessed to tax and tax was also paid. The same invoice was subject matter of another bill of entry which was assessed to tax and tax was cleared. Therefore, the error is apparent on the face of the order. The direction, finding rendered by the Tribunal that the assessee is entitled to refund of excise duty paid is set aside and the matter is remanded to the Assessing Officer to consider the appellant's request, take note of the facts and exercise power under Section 154 of the Act and proceed to pass orders in accordance with law - Appeal allowed by way of remand.

Summary

Issues:
1. Correction of errors in the Bill of Entry under Section 154 of the Customs Act, 1962.
2. Lawfulness of rectifying importer's mistake by Refund Authority for excess duty refund without considering relevant legal precedents.

Analysis:

Issue 1: Correction of errors in the Bill of Entry under Section 154 of the Customs Act, 1962

The case involved an appeal by the Revenue challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal regarding a bill of entry filed by the assessee for clearance of imported goods. The assessee had paid duty twice for the same invoice, leading to a refund claim for the excess duty paid. The Assistant Commissioner of Customs advised the assessee to seek review or file an appeal against the assessment order. The assessee opted for review but was rejected on grounds of non-maintainability without challenging the assessment order. The first appellate authority also denied the refund claim, emphasizing the necessity of filing an appeal against the assessment. However, the Tribunal held that clerical errors could be rectified under Section 154 of the Act and allowed the appeal for refund, emphasizing the need to avoid unjust enrichment.

Issue 2: Lawfulness of rectifying importer's mistake by Refund Authority for excess duty refund

The Tribunal considered the power under Section 154 of the Act to rectify clerical errors, citing relevant tribunal decisions. It noted that the Refund officer advised the assessee to seek review or file an appeal, which the assessee followed. The Tribunal disagreed with the first appellate authority's restrictive interpretation of Section 154 and allowed the appeal for refund, directing the refund of excess duty paid upon correction of the error. However, the Tribunal's direction regarding the entitlement to refund was set aside, and the matter was remanded to the Assessing Officer to consider the request, exercise power under Section 154, and pass orders accordingly, ensuring a fair opportunity for the assessee.

In conclusion, the judgment clarified the application of Section 154 for rectifying errors in the bill of entry and emphasized the importance of considering factual positions alongside legal principles in such cases. The decision highlighted the need to prevent unjust enrichment while ensuring a fair process for refund claims and corrections in duty assessments.