2023 (3) TMI 846 - HC - Customs

Refund claim - seeking re-assessment of the Bills of Entry in terms of Section 149 read with Section 154 of the Customs Act, 1962 - duty paid without noticing that the petitioner is eligible for a concessional rate of tax at of 15% vide Notification No.57 of 2018 Cus dated 07.08.2018 - rejection of request for re-assessment and refund on the ground that the petitioner had not filed statutory appeal with the appropriate authority seeking modification of the self-assessment. HELD THAT - Inter-alia the first respondent refers to a Public Notice issued by the Commissioner of Customs / R2 in Public Notice No.88 of 2009 dated 18.10.2019. In this public notice, the authority refers to a judgment of the Hon'ble Supreme Court in the case of I ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT . In that judgment, the Hon'ble Supreme Court was concerned with the question as to whether in the absence of any challenge to an order of assessment by way of appeal, a refund application against the assessed duty could be entertained. Public Notice No.88 of 2019 which states that 'no reassessment shall be allowed unless the order of assessment including self assessment is duly modified by way of appeal ' is incorrect as it places a restriction on the mode of re-assessment. No restrictions was envisaged by the Hon'ble Supreme Court that has made it clear that the modification could be by way of statutory appeal or under relevant provisions of the Act. To this extent, the stipulation in public notice dated 15.10.2019, does not align with the ratio of the judgment of the Supreme Court. In light of the categoric pronouncement of Hon'ble Supreme Court as aforesaid, resort to Section 149 of the Customs Act is perfectly in order and thus the application of the petitioner is restored to the file of the first respondent for consideration in line with the conclusion in the case of ITC and observations made herein - In the present case, the document is a statutory Notification. The authority is directed to hear the petitioner, consider applicability or otherwise of the Exemption Notification to its case and pass orders afresh, all within a period of four weeks from date of receipt of this order. Petition allowed.

Summary

Issues involved:
The issues involve the eligibility of the petitioner for a concessional rate of tax, the rejection of the request for re-assessment and refund by the respondent, and the interpretation of a Public Notice in light of a judgment of the Hon'ble Supreme Court.

Eligibility for Concessional Rate of Tax:
The petitioner, engaged in the business of fastening and assembling technologies, had cleared consignments of screws from a Special Economic Zone. The petitioner was eligible for a concessional rate of tax at 15% under Notification No.57 of 2018 - Cus dated 07.08.2018. However, Basic Customs Duty had been remitted at a higher rate of 25% at the time of clearance to the domestic tariff area.

Rejection of Re-assessment and Refund Request:
A request for assessment and refund was filed by the petitioner seeking re-assessment of the Bills of Entry under Section 149 read with Section 154 of the Customs Act, 1962. The respondent rejected the request on the grounds that the petitioner had not filed a statutory appeal seeking modification of the self-assessment.

Interpretation of Public Notice and Supreme Court Judgment:
The first respondent referred to a Public Notice which cited a judgment of the Hon'ble Supreme Court regarding the entertainability of refund applications in the absence of a challenge to an order of assessment through appeal. The Supreme Court had clarified that a challenge to an order, including self-assessment, must be made through statutory appeal or other relevant provisions of the Act. The Public Notice placed restrictions on re-assessment, which were deemed incorrect in light of the Supreme Court's ruling.

Conclusion:
The High Court, in line with the Supreme Court's pronouncement, directed the restoration of the petitioner's application for re-assessment to the respondent for consideration. The Court emphasized that the modification of an order could be through statutory appeal or relevant provisions of the Act, not limited by the Public Notice. The authority was instructed to review the applicability of the Exemption Notification to the petitioner's case and make a decision within four weeks. The writ petitions were allowed, with no costs incurred.