2004 (5) TMI 153 - AT - Customs

Summary

Issues:
- Appeal against the grant of refund of customs duty
- Eligibility for refund after shortage of goods found post customs out-of-charge order

Analysis:
1. The appeal was filed by the department challenging the grant of a refund of customs duty to the respondents by the lower appellate authority. Despite notice, there was no representation from the respondents.

2. The case involved the import of cables in 1991 by the respondents, who later discovered a shortage of quantity compared to the declared quantity after the customs out-of-charge order was passed. Subsequently, they filed a claim for a refund of duty on the short-supplied goods, which was rejected by the original authority. However, the appeal filed by the respondents against the original authority's decision was allowed by the Collector (Appeals).

3. The Departmental Representative (DR) argued that based on previous Tribunal decisions, no refund of customs duty is admissible when a shortage of goods is discovered after the imported consignment has left customs charge. The DR cited the case of Uniferro International Ltd. v. Collector of Customs, Bombay, where a similar situation was addressed. Despite the foreign supplier providing free replenishment of the short-shipped goods, the Tribunal held that the importer was not eligible for a refund. The Tribunal in the current case found that the shortage was identified in the importer's premises after the consignment left customs charge, making it ineligible for a refund.

4. The Tribunal concluded that the refund claim of the respondents was rightly rejected by the original authority. The order of the Collector (Appeals) setting aside the original authority's decision was deemed unsustainable. Therefore, the appeal was allowed, and the impugned order was set aside.

This detailed analysis highlights the key legal arguments, precedents, and the ultimate decision of the Appellate Tribunal CESTAT, Chennai regarding the eligibility for a refund of customs duty in cases of shortages discovered post customs out-of-charge order.