2023 (3) TMI 25 - AT - Customs

Refund of Customs Duty - Rectification / amendment of Bill of Entry u/s 149 - Computation of Period of limitation - refund claims filed by the respondent were barred by time or not - HELD THAT - In the present case the order carrying out an amendment in the Bills of Entry under section 149 of the Customs Act attained finality as the department did not challenge these orders in appeal. It is only during the course of refund applications that the department took a stand that since the order of the assessment was not assailed by the respondent in appeal under section 128 of the Customs Act the refund applications could not be allowed. Such a stand could not have been taken by the Department. If the department felt aggrieved by the order seeking an amendment in the Bills of Entry under section 149 of the Customs Act it was for the department to have assailed the order by filing an appeal under section 128 of the Customs Act. This plea could not have been taken by the department to contest the claim of the respondent while seeking refund filed as a consequence of the reassessment of the Bills of Entry or amendment in the Bills of Entry - The Commissioner (Appeals) therefore committed no illegality in taking a view that refund has to be granted to the respondent as the order for amendment in the Bills of Entry had attained finality. Whether the refund claims were barred by time? - HELD THAT - The Commissioner (Appeals) held that if section 149 of the Customs Act relating to amendment in the Bills of Entry is made applicable the cause of action for claiming refund would arise only after the amendment is made and so the limitation for claiming refund would start from that date. In coming to this conclusion the Commissioner (Appeals) placed reliance upon the decision of the Bombay High Court in KESHARI STEELS VERSUS COLLECTOR OF CUSTOMS BOMBAY 1996 (9) TMI 154 - HIGH COURT OF JUDICATURE AT BOMBAY wherein what was examined was whether the rejection of the refund claim on the ground of limitation contemplated under section 27 of the Customs Act was justified. It was held by the Bombay High Court that the refund was within time from the date the rectification was carried out and limitation was not to be counted from the date of assessment. This decision has been affirmed by the Supreme Court in COLLECTOR VERSUS KESHARI STEELS 1997 (12) TMI 643 - SC ORDER . It would be seen that the Bombay High Court held that the question of refund would arise only when the assessment order is rectified - the Commissioner (Appeals) therefore committed no illegality in holding that the refund claims were not barred by time. Appeal dismissed.

Summary

Issues Involved:
1. Applicability of conditions of non-availment of CENVAT credit.
2. Re-assessment and amendment of Bills of Entry.
3. Time-barred nature of refund claims.
4. Necessity of appealing against the assessment order.

Detailed Analysis:

1. Applicability of Conditions of Non-Availment of CENVAT Credit:
The respondent, M/s Lava International Limited, imported mobile phones and parts, paying additional duty of customs (CVD) at 6% under Serial No. 263A of Notification No. 12/2012-CE. However, the respondent did not avail of the benefits of paying excise duty at a reduced rate of 1% or 2% due to a misunderstanding regarding the fulfillment of conditions set out in the Notification. This issue was clarified by the Supreme Court in SRF Ltd. vs. Commissioner of Customs, Chennai, which ruled in favor of the importers, stating that conditions of non-availment of CENVAT credit were not applicable.

2. Re-Assessment and Amendment of Bills of Entry:
Following the Supreme Court's decision in SRF, the respondent sought re-assessment of the Bills of Entry and claimed a refund of the differential CVD. Initially, the Deputy Commissioner re-assessed the Bills of Entry in March 2018, but later amended these orders under section 154 of the Customs Act to reflect the amendment under section 149. The amendment orders were accepted by the customs authorities as no appeal was filed by the department, thereby attaining finality.

3. Time-Barred Nature of Refund Claims:
The Assistant Commissioner rejected the refund applications on the grounds that they were time-barred and that the respondent should have filed an appeal against the assessment order. However, the Commissioner (Appeals) allowed the appeals by the respondent, reasoning that:
- The Bills of Entry were amended and the orders attained finality.
- Refund claims filed within one year from the date of amendment cannot be considered time-barred.
- The Supreme Court in ITC Ltd. did not restrict the modification of assessment orders to only appeals under section 128 of the Customs Act.

4. Necessity of Appealing Against the Assessment Order:
The department argued that the respondent should have filed an appeal against the assessment order. However, the Commissioner (Appeals) and subsequent judgments clarified that the respondent could seek amendments under sections 149 or 154 of the Customs Act. The Bombay High Court in Dimension Data India and the Telangana High Court in Sony India supported this view, stating that amendments under sections 149 or 154 are valid methods for modification of Bills of Entry, and refund claims should be considered from the date of such amendments.

Conclusion:
The Tribunal upheld the Commissioner (Appeals) decision, stating that:
- The amendments made in the Bills of Entry attained finality and the refund claims were within the permissible time frame.
- The respondent was not required to file an appeal against the assessment order when amendments were sought and made under sections 149 or 154 of the Customs Act.
- The department's contention that the refund claims were time-barred was not valid as the limitation period started from the date of amendment of the Bills of Entry.

Therefore, the appeals filed by the department were dismissed, and the six stay applications were also rejected.