2024 (11) TMI 1357 - AT - Customs

Refund application filed beyond the time limit specified u/s 11B - refund claim was filed which is beyond six months from the date of payment of duty and rejected the claim as being time-barred as well as holding that the assessment order was not challenged in a manner known to law - HELD THAT - Amounts claimed were part of the export duty only and until final assessments are done the excess duty paid cannot be quantified. This being so he should have remanded the matter back to the file of the Lower Authority to examine the claim after finalization of the assessment apart from the fact that the Original Authority had decided the matter ex-parte after a long delay thus violating the principles of natural justice. His action of rejecting the appeal was hence not in order. The judgments cited by revenue are not relevant to the facts of the case and are distinguished. We find that this is a refund claim pertaining to Shipping Bill dated 06/08/2008. The claim was rejected by the said Lower Authority after six years without affording the appellant any hearing vide order dated 24/12/2014 on the ground that the appellant had not challenged the order of assessment. Such an action was not legal and proper when the assessment was provisional and the order was also passed violating the principles of natural justice. As held by Constitutional Courts whenever an order is struck down as invalid being violation of principles of natural justice there is no final decision of the case and therefore proceedings are left open. All that is done is that the order assailed by virtue of its inherent defect is vacated but the proceedings are not terminated. See Guduthur Bros. Vs Income Tax Officer Special Circle Bangalore 1960 (7) TMI 5 - SUPREME COURT and Superintendent (Tech. I) Central Excise I.D.D. Jabalpur and Ors. Vs Pratap Rai 1978 (4) TMI 97 - SUPREME COURT . The impugned order has also been found defective as stated above. This being so the appeal succeeds. However the fact of final assessment of the SB is not available and hence the matter needs to be remanded back to the file of the Original Authority to examine the matter on the basis of the finally assessed SB on merits. Considering the considerable delay involved and the improper application of law and procedure in the matter it is desirable that the matter be monitored by the jurisdictional JC / ADC of Customs Custom House Chennai to ensure that there is no further delay in the matter by the Original Authority and that the issue is finalised within 90 days of receipt of this order.

Summary

Issues:
Refund claim time-barred, violation of principles of natural justice, provisional assessment, remand for final assessment.

Analysis:
The appeal was filed by M/s. Trimex Industries Pvt. Ltd. against the Order in Appeal passed by the Commissioner of Customs (Appeals - II), Chennai, rejecting their refund claim for excess export duty paid. The appellant, an exporter of iron ore, exported 49500 MT of calibrated iron ore lumps in bulk. The dispute arose when the appellant paid additional export duty of Rs. 44,85,294/- based on FOB value calculation, apart from the duty paid on the cum-duty basis. The appellant sought a refund of this additional duty, but the claim was rejected by the Original Authority as time-barred and for not challenging the assessment order. The appeal before the Commissioner (Appeals) was also dismissed. The appellant contended that the circular issued later clarified the valuation method, and they filed a refund claim within the time limit. The appellant argued that the rejection of the claim without a personal hearing and on the grounds of limitation was unjust. The AR cited judgments to support the time-barred claim. The Tribunal found the rejection of the claim without final assessment and violation of natural justice to be improper.

The Tribunal observed that the amounts claimed were part of the export duty and could only be quantified after final assessments. The Commissioner Appeals should have remanded the matter for final assessment instead of rejecting the appeal. The Tribunal noted that the claim was rejected after six years without a hearing, which was not in accordance with the law, especially when the assessment was provisional. Citing legal precedents, the Tribunal emphasized that when an order is invalidated due to a breach of natural justice, the case remains open for further proceedings. The impugned order was deemed defective due to the violation of natural justice, leading to the success of the appeal. The Tribunal ordered a remand of the matter to the Original Authority for examination based on the finally assessed Shipping Bill, to be monitored by the jurisdictional Customs authorities to ensure timely resolution within 90 days.

In conclusion, the appeal was allowed by way of remand for further assessment and appropriate relief as per the law. The Tribunal directed the Original Authority to finalize the matter within 90 days from the receipt of the order to avoid further delays and ensure proper application of law and procedures.