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2004 (8) TMI 170 - AT - Central ExciseApplicability of Section 149 and Section 27 of the Customs Act to the refund claims - Valuation (Customs) - Appeal - Precedent - Whether the post-importation price reduction can be considered for reassessment of customs duty - HELD THAT - The transaction value at the time of assessment was the value indicated in the invoice and the same was accepted by the assessing authority. Duty was paid on that basis. Later on, negotiations took place between the appellants and their supplier leading to reduction of price and the latter issued credit note to the former in respect of the differential pirce. The refund claims filed by the appellants are in respect of the duty paid on the differential value. It has been held by the lower authorities to the effect that it was not permissible in law to reassess the Bills of Entry under Section 149 of the Customs Act on the basis of posterior evidence furnished by the importer after clearance of the goods. Ld. JCDR has particularly relied on the proviso to Section 149 of the Customs Act. The provision does not authorise reassessment of Bill of Entry. It is only conferring discretion on the proper officer of Customs to permit the importer to amend his Bill of Entry subsequent to clearance of the goods on the basis of anterior evidence. In the present case, the reduced prices were not in existence at the time of clearance of the goods and therefore the proper officer of Customs was barred, under the proviso to Section 149, from allowing the importer to amend the declared value of the goods in the Bill of Entry. The appellants did not apply for such amendment either. Hence Section 149 was not applicable to the facts of the case. The provision appears to have been erroneously invoked by the lower authorities to reject the refund claims. On this limited point, the appellants seem to be supported by the Tribunal's decision in Sanghi Medical Centre 1997 (5) TMI 205 - CEGAT, NEW DELHI , wherein it was held that a refund claim was not liable to be rejected by invoking Section 149. The assessments of the Bills of Entry had not been appealed against by the assessee and the same became final and binding on them. It was not open to them under the Customs Act to challenge the assessments through refund claims filed under Section 27 of the Act. It has been argued to the contra by ld. Counsel relying on the Supreme Court's decision in Karnataka Power Corporation 2002 (4) TMI 79 - SUPREME COURT wherein the Court remanded the case to the original authority for fresh decision on the assessee's claim for reclassification of the imported goods and consequential refund of customs duty. In that case, the claim for reclassification was, obviously, based on materials available at the time of import, whereas, in the instant case, the appellants, in their refund applications, claimed revaluation of the goods on the basis of post-importation reduction of price. Any such revaluation would have directly offended Section 14 of the Customs Act by sabotaging the sanctity of transaction value (invoice value) of the goods. Hence, it is not to be equated with a case of reclassification of goods. Classification of goods is the Revenue's burden and that is why the Apex Court remanded the case of Karnataka Power Corporation (supra), to the original authority to consider their claim for reclassification. Thus, we are of the view that the decision in Karnataka Power Corporation (supra), cannot be an appropriate precedent for the instant case. Consequently, the Tribunal's decision in HPCL 2003 (4) TMI 164 - CEGAT, CHENNAI , case, wherein Karnataka Power Corporation was followed, cannot be followed in the present case. We have already noted that it is not good law in view of the Apex Court's view on the substantive issue. In the result, we hold that the rejection of the refund claims is in order. These appeals are dismissed.
Issues Involved:
1. Whether the post-importation price reduction can be considered for reassessment of customs duty. 2. Applicability of Section 149 and Section 27 of the Customs Act to the refund claims. 3. Finality of the assessment of Bills of Entry and its implications on refund claims. Summary: 1. Post-importation Price Reduction: The appellants argued that the post-importation price reduction was in terms of a pre-existing contract and should be adopted as the assessable value for customs duty. They contended that the assessments on the Bills of Entry should be treated as provisional and finalized based on the reduced price agreed upon later. The Tribunal, however, held that the invoice value at the time of assessment was the legitimate transaction value u/s 14 of the Customs Act. The reduced price negotiated post-clearance could not be considered for reassessment, as it was not the transaction value at the time of importation. 2. Applicability of Section 149 and Section 27 of the Customs Act: The appellants claimed that Section 27, which governs refund claims, is a self-contained provision independent of Section 149. They argued that the refund should be granted based on the excess duty paid. The Tribunal clarified that Section 149 allows for the amendment of documents but does not authorize reassessment of Bills of Entry. The reduced prices were not in existence at the time of clearance, thus barring any amendment u/s 149. The Tribunal found that the lower authorities erroneously invoked Section 149 to reject the refund claims. 3. Finality of Assessment of Bills of Entry: The Tribunal emphasized that the assessments of the Bills of Entry were final and binding as they were not challenged by the appellants. Citing multiple precedents, including the Supreme Court's ruling in CCE v. Flock (India) Pvt. Ltd., the Tribunal held that an unchallenged assessment cannot be indirectly contested through a refund claim u/s 27. The Tribunal noted that the appellants' reliance on Karnataka Power Corporation Ltd. was misplaced, as that case involved reclassification based on materials available at the time of import, unlike the present case which involved post-importation price reduction. Conclusion: The Tribunal dismissed the appeals, holding that the rejection of the refund claims was in order. The assessments of the Bills of Entry were final and binding, and the refund claims based on post-importation price reductions were not maintainable.
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