2018 (8) TMI 568 - HC - Customs

100% EOU - Refund claim - duty paid under protest - Held that - This Court is of the view that when the order passed by the Tribunal has not been stayed or set aside by the Hon ble Supreme Court, it is the bounden duty of the Adjudicating Authority to follow the law laid down by the Tribunal. Since a binding decision has not been followed by the Adjudicating Authority in this case, this Court can interfere straight away without relegating the assesse to file an appeal - order passed by the Adjudicating Authority shall stand quashed. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Classification of export consignment under CTH 26140010 or CTH 26140020, refund application, adjudication by the Adjudicating Authority, compliance with Tribunal's order, quashing of Adjudicating Authority's orders, provision of security for refund, direction for refund by the second respondent.

Analysis:
The petitioner, a registered 100% EOU engaged in manufacturing and exporting, disputed the classification of their export consignment under CTH 26140010 by the respondent, asserting it should be under CTH 26140020, leading to payment of export duty under protest. Subsequently, a refund application was filed, contested by the second respondent pending adjudication, prompting the writ petition challenging the non-refund. The Court intervened, impleading the Adjudicating Authority to decide the matter for substantial justice, keeping the writ pending.

Upon review, the Adjudicating Authority rejected the petitioner's stance, concluding that the exported Ilmenite did not undergo any enhancement or upgrading process, thus correctly classified under CTH 26140010. Reference was made to a similar case pending before the Supreme Court, emphasizing the need to follow the Customs Act provisions. The Court noted the similarity with a Tribunal's decision favoring the assessee, highlighting the Adjudicating Authority's failure to adhere to binding precedents.

Considering the non-stayed Tribunal order and the Adjudicating Authority's non-compliance, the Court quashed the Authority's orders, directing the refund to the petitioner within four weeks. The petitioner offered immovable property security for the refund amount, to remain unencumbered until the Supreme Court's final decision. The Adjudicating Authority was instructed to reevaluate based on the Supreme Court's ruling, ensuring compliance with binding precedents. The Writ Petition was allowed without costs, with connected petitions closed as a consequence of the judgment.