2024 (3) TMI 1055 - AT - Customs

Rejection of refund claim - amount deposited after pre-notice consultation - interpretation of section 28 of the Customs Act 1962 - Non issuance of Show Cause Notice - HELD THAT - A close look at section 28 indicates that a pre-notice consultation is necessary before issuing notice i.e. Show Cause Notice. The purpose of the same as understood is obviously to indicate the recovery of duties not levied or not-paid or short-levied or short-paid . Here in the case on hand a pre-notice consultation dated 9.10.2017 was issued in terms of proviso to section 28(1)(a) ibid to the person chargeable with duty or interest and apparently the appellant responded positively without any demur by paying the duty and interest as indicated. What was indicated / proposed to be demanded was a differential duty and hence nothing more needs to be said about the characteristic of the demand since when proposed to be demanded the payment was made religiously. Much emphasis has been laid on the non-issuance of letter / communication in writing as specified under sec. 28(2) and it is the case of the appellant that it having not issued any such communication in writing the payment made by it loses the characteristic of duty - it is found that a positive act followed the pre-notice consultation and hence nothing can be looked beyond for anything. If the pleas urged is to be considered then there should have been a communication to the least indicating as to why payment as proposed / demanded was made but no such things appear in the file. The appellant having acquiesced no further action was felt necessary. It appears that the differential duty arose on account of mis-match with regard to the classification of the product imported. It is the case of the appellant that the correct classification was 8480.60. But there was no request made for rectification / re-assessment since it is the settled position of law that since acceptance of Bill of Entry is considered as self-assessment per se the importer if aggrieved by the same has to seek for modification / rectification / re-assessment as held by the Hon ble Supreme Court in the case of ITC Ltd. Vs. CCE Kolkata 2019 (9) TMI 802 - SUPREME COURT . Rather the appellant chose to seek only the refund which has rightly been rejected by the original authority. There are no merit in the case of the appellant - appeal dismissed.

Summary

Issues Involved:
1. Classification of imported goods.
2. Entitlement to refund of duty and interest.
3. Compliance with procedural requirements under Section 28 of the Customs Act, 1962.

Summary:

1. Classification of Imported Goods:
The appellant imported aluminium framework from South Korea and classified the goods under CTH 7610 9020, claiming exemption from BCD (Sl. No. 610 of Notification No. 15/2009-Cus. dated 31.12.2009 as amended). The supplier had classified the same under CTH 8480.60. The error was discovered during scrutiny by the Risk Management System (RMS) of Customs, leading to a pre-consultative notice indicating a mismatch in classification and a demand for differential duty of Rs.96,34,170/-. The appellant paid the differential duty and interest.

2. Entitlement to Refund of Duty and Interest:
The appellant filed for a refund of duty and interest under section 27(1)(a) of the Customs Act, 1962, which was rejected by the Assistant Commissioner of Customs (Refunds) on several grounds:
- Differential duty was not paid under protest.
- No appeal was filed against the Deputy Commissioner's order.
- Refund did not arise from self-assessment but from Revenue's demand.
- The refund claim was premature and lacked sustainable grounds.

The first appellate authority upheld the rejection, leading to the current appeal.

3. Compliance with Procedural Requirements u/s 28 of the Customs Act, 1962:
The Tribunal examined whether the Revenue authorities were correct in rejecting the appellant's refund claim. Section 28 requires pre-notice consultation before issuing a Show Cause Notice (SCN). The appellant responded positively to the pre-notice consultation by paying the duty and interest, thus no SCN was issued. The Tribunal disagreed with the appellant's contention that the payment would assume the character of duty only when accompanied by a letter requesting non-issuance of a notice. The appellant's acquiescence to the pre-notice consultation meant no further action by the Revenue was necessary.

The Tribunal also referenced the Supreme Court's judgment in ITC Ltd. Vs. CCE, Kolkata, stating that self-assessment is appealable and any claim for refund must follow modification or re-assessment of the Bill of Entry. The appellant did not seek rectification or re-assessment but only a refund, which was rightly rejected by the original authority.

Conclusion:
The Tribunal found no merit in the appellant's case and dismissed the appeal, affirming the rejection of the refund claim. The order was pronounced in open court on 22.03.2024.