2024 (11) TMI 752 - AT - Customs

Department's appeal before Commissioner (A) against consequential Order of refund which was found due on finalization of assessments was maintainable, when no appeal was filed by department against finalization of assessments - Whether, in any event, in the case of import of Liquid Bulk Cargo viz. Petroleum Crude Oil, the quantity as per Ship Ullage measurement at Port of Discharge can be taken to be the quantity imported for assessment of duty although it does not represent the actual quantity unloaded in India? - Whether, when the quantity ascertained as per Ship Ullage measurement at Port of Discharge is only marginally in excess of the Bill of Lading and Invoice quantity by 0.30%, whether extra duty on such marginal excess is payable, when the transaction value remained unchanged. HELD THAT - We find that irrespective of any dispute raised by the department by issuing a show cause notice and further proceedings against the refund order, but the fact remains that the refund has arisen out of the final order on bill of entry passed by the assessing authority and due to which the refund was rightly sanctioned by the sanctioning authority. It is also a fact on record that the Revenue has not challenged the final assessment order which is the genesis for granting the refund. In such situation the entire proceeding of issuing a show cause notice, adjudication and passing the appellate order, in our view is clearly infructuous. On this ground itself, the impugned order passed by Commissioner (Appeals) is not sustainable. Similar view was taken in the case of ITC Limited 2019 (9) TMI 802 - SUPREME COURT (LB) wherein it was categorically held that unless the assessment order is challenged, no consequential effect can be given. We are therefore, of considered view that since the final assessment order which is undisturbed attained finality and refund has arisen out of such order, at a later stage before Commissioner (Appeals), Revenue cannot made an allegation contrary to the final assessment order, therefore, the impugned order passed by Commissioner (Appeals) is not sustainable, accordingly, the same is set aside. The appeal is allowed with consequential relief.

Summary

Issues:
1. Maintainability of department's appeal against Consequential Order of refund without challenging final assessment order.
2. Assessment of duty based on Ship Ullage measurement for Liquid Bulk Cargo.
3. Payment of extra duty on marginal excess quantity despite unchanged transaction value.

Analysis:

Issue 1:
The first issue pertains to the maintainability of the department's appeal against the Consequential Order of refund without challenging the final assessment order. The appellant argued that since the refund arose from the final assessment order, which was not challenged by the department, the show cause notice for recovery of the refund was not legal. The Tribunal found that the refund was rightly sanctioned based on the final assessment order, which the department did not contest. Citing various judgments, including UOI vs Food Specialities, the Tribunal held that the proceedings against the refund order were infructuous as the department did not challenge the genesis of the refund. The Tribunal set aside the impugned order, emphasizing that the department cannot allege contrary to the final assessment order at a later stage.

Issue 2:
The second issue revolves around the assessment of duty for import of Liquid Bulk Cargo, specifically Petroleum Crude Oil, based on Ship Ullage measurement at the Port of Discharge. The appellant raised concerns about using Ship Ullage measurement for duty assessment, which may not reflect the actual quantity unloaded in India. However, the Tribunal did not delve deeply into this issue as it primarily focused on the maintainability of the department's appeal against the refund order.

Issue 3:
The final issue pertains to the payment of extra duty on a marginal excess quantity of Liquid Bulk Cargo when the transaction value remains unchanged. The Tribunal did not provide a detailed analysis of this issue in the judgment as it primarily focused on the procedural aspect of the department's appeal against the refund order. Therefore, the Tribunal kept this issue open for future consideration.

In conclusion, the Tribunal primarily addressed the procedural aspect of the department's appeal against the Consequential Order of refund, emphasizing the importance of challenging the final assessment order before disputing any consequential orders. The Tribunal set aside the impugned order, allowing the appeal with consequential relief and leaving other issues raised by the appellant open for further consideration.