2023 (3) TMI 752 - AT - Customs

Benefit of exemption of SAD - refund claims filed were rejected as premature by the Assistant Commissioner of Customs (Refunds) as there was no challenge of assessment done in terms of the Hon ble Apex Court decision in the case of PRIYA BLUE INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) 2004 (9) TMI 105 - SUPREME COURT - Applicability of N/N. 51/96-Cus dated 23.07.1996 for import of various scientific and technical instruments during June, 2011 to August 2011 - excess duties paid are refundable or not without challenging the self-assessment or order of the assessment of the bills of entry as found in this appeal. HELD THAT - The issue is covered in the assessee s own case NATIONAL INSTITUTE OF OCEAN TECHNOLOGY VERSUS COMMISSIONER OF CUSTOMS (AIR) , CHENNAI 2015 (4) TMI 198 - CESTAT CHENNAI where it was held that In absence of any description and nomenclature of additional duty in the notification there cannot be any interpretation otherwise possible to deprive the appellant from exemption of additional duty of Customs. In view of the clear mandate of the notification to exempt additional duty of customs, the goods imported are eligible to the exemption from additional duty of customs thereon. Non-challenge to the order of assessment against the bills of entry - HELD THAT - The Tribunal has held in the case of M/S. FRESENIUS MEDICAL CARE INDIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS - IV CHENNAI 2018 (7) TMI 103 - CESTAT CHENNAI has held that the Court noticed that it was always not necessary to have an order of assessment for a person to claim refund of duty. The initial payment of duty in terms of Section 27(1)(i) of the Act could be pursuant to an order of assessment or in terms of Section 27(1)(ii) of the Act could be borne by him. However, it is noted that the Hon ble Apex Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT has held that the assessment order including self-assessment needs to be challenged to become eligible for refund. In this case, the appellants when applied for refund, the refund sanctioning authority has communicated vide their letter F. No. S25A/ Gen/27/2010-Ref (Air) dated 16.09.2011, that the order of assessment cannot be reviewed or modified in terms of the Hon ble Apex Court decision in the case of M/s. Priya Blue Industries Vs. Commissioner of Customs. Refund would arise only if the order is reviewed, modified or revised. The decision of the Hon ble Apex Court in ITC Ltd. Vs. Commissioner of Central Excise, Kolkata-IV set aside the decisions in the case of AMAN MEDICAL PRODUCTS LTD. VERSUS COMMISSIONER OF CUSTOMS, DELHI 2009 (9) TMI 41 - DELHI HIGH COURT and MICROMAX INFORMATICS LIMITED VERSUS UNION OF INDIA OTHERS 2016 (3) TMI 431 - DELHI HIGH COURT . Thus, there is no need to decide about the eligibility of the appellant for SAD exemption under Notification No. 51/1996 was issued on 23.07.1996. Further, the facts in this appeal clearly indicate that the appellants have not challenged the order of assessment, as such, we have to hold that appellants are not eligible for the refund. The order of rejection of refund by the refund sanctioning authority is upheld. Appeal dismissed.

Summary

Issues Involved:
1. Eligibility for exemption from payment of Special Additional Duty (SAD) under customs Notification No. 51/96-Cus dated 23.07.1996.
2. Refundability of excess duties paid without challenging the self-assessment or order of assessment of the bills of entry.

Summary:

Issue 1: Eligibility for Exemption from SAD

The appellant, M/s. National Institute of Ocean Technology, imported scientific instruments eligible for customs duty exemption under Notification No. 51/1996. However, the system did not extend the 4% SAD exemption, necessitating payment of SAD for clearance. The Lower appellate authority concluded that Notification No. 51/1996 did not cover SAD exemption, as it was issued before the introduction of SAD under Section 3A of CTA, 1975, which was omitted in 2005. The authority upheld the rejection of refund claims, stating the system calculated SAD based on Notification No. 19/2006-Customs. The Tribunal found the issue covered in the appellant's favor in a previous case, stating the notification exempted the whole additional duty under Section 3 of CTA, including SAD.

Issue 2: Refundability of Excess Duties Without Challenging Assessment

The appellant argued that the refund claims should not require challenging the assessment, citing several precedents where refunds were granted without such challenges. However, the Tribunal noted the Hon'ble Apex Court's decision in ITC Ltd. Vs. Commissioner of Central Excise, which mandated challenging the assessment order to be eligible for a refund. The Tribunal concluded that the refund sanctioning authority correctly rejected the claims as the appellant did not challenge the assessment. Consequently, the appeal was dismissed as not maintainable.

Conclusion:

The appellant was not eligible for the refund of SAD paid due to the failure to challenge the assessment order, despite the Tribunal's acknowledgment of the notification's broad exemption scope. The appeal was dismissed, upholding the refund rejection.