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2016 (1) TMI 959 - HC - CustomsJurisdiction to sanction Refund - Customs authorities or SEZ authorities - Refund of additional duty - SEZ unit - According to the petitioner, the respondents collected a sum of ₹ 18,66,985/- by way of countervailing duty, though it was not payable by the petitioner. - Held that - As long as the duty in the nature of customs duty has been collected, the refund would be payable only in terms of Section 27 of the Customs Act. Since the statute also prescribes the authority competent to entertain such an application, refund applications would be maintainable before such authority. Unless there is amendment in law, the respondents cannot prevent the competent officer from exercising his statutory powers, in fact, duties. In the result, impugned communication dated 30.11.2015 is quashed. The refund application shall be decided by the competent officer under the Customs Commissionerate, Surat as expeditiously as possible and preferably before 30.04.2016.
Issues:
1. Refusal to decide refund application by Assistant Commissioner of Customs. 2. Authority to process refund claims for units in Special Economic Zones (SEZs). 3. Validity of Ministry of Finance directives regarding refund claims. 4. Jurisdiction of Customs authorities over refund applications. 5. Assessment and collection of duty by SEZ authorities. Issue 1: Refusal to decide refund application by Assistant Commissioner of Customs The petitioner challenged a communication where the Assistant Commissioner of Customs returned the refund application, citing lack of authority to process it. The petitioner, a unit in a Special Economic Zone (SEZ), claimed a refund of countervailing duty collected erroneously. Despite a previous court ruling clarifying the authority to decide such refund claims, the Assistant Commissioner refused to entertain the petitioner's application, stating that another Commissionerate had jurisdiction over the unit. The High Court deemed the Assistant Commissioner's approach incorrect and quashed the communication, directing the competent officer under the Customs Commissionerate to decide the refund application promptly. Issue 2: Authority to process refund claims for units in Special Economic Zones (SEZs) The legal dispute arose from confusion regarding the authority responsible for processing refund claims for units in SEZs. The Ministry of Finance had issued directives leading to a situation where neither the Customs Commissioner nor the SEZ Commissioner could decide refund claims due to the lack of provisions in SEZ laws. The High Court clarified that without statutory changes, the Ministry could not prevent the Customs Commissioner from processing refund claims, emphasizing that such applications fall under Section 27 of the Customs Act and must be decided by the designated customs authority. The judgment mandated that until proper mechanisms are established under SEZ laws, the Customs Commissioner retains authority to handle refund claims for SEZ units. Issue 3: Validity of Ministry of Finance directives regarding refund claims The High Court declared the Ministry of Finance directives from 2012 invalid, emphasizing that statutory provisions must be enacted or amended to alter the authority responsible for refund claims. The court highlighted that refund applications for customs duty must be made under Section 27 of the Customs Act, and any changes to the processing authority require legal amendments. The judgment underscored that the Ministry's directives lacked legal force and that refund applications must be entertained by the designated customs authority until statutory changes are implemented. Issue 4: Jurisdiction of Customs authorities over refund applications The judgment reinforced that customs duty refund claims fall under Section 27 of the Customs Act, empowering the Assistant Commissioner of Customs to decide on refund applications if the duty paid is deemed refundable. The court cited a previous Supreme Court ruling that emphasized the necessity of following statutory provisions for refund claims related to customs duty. It clarified that the Customs Commissioner retains the authority to entertain and decide on refund applications until statutory amendments dictate otherwise. Issue 5: Assessment and collection of duty by SEZ authorities A contention arose regarding the assessment and collection of duty by SEZ authorities, with the Department arguing that duty was assessed and collected by SEZ authorities, not customs authorities. However, the court held that as long as customs duty was collected, refund claims must adhere to Section 27 of the Customs Act, irrespective of the entity collecting the duty. The judgment emphasized that refund applications for customs duty must be processed by the designated customs authority, maintaining the statutory framework until legislative changes dictate otherwise.
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