2019 (3) TMI 126 - AT - Customs

Amendment in the bills of entry - Section 149 of the Customs Act, 1962 - customs duty paid on the provisional price - Held that - In this case, price was provisional and this fact was known to the Department and at the time of filing the Bill of Entry also, it was stated that the price is provisional. More over the variation clauses of sale and purchase agreement entered into between the respondent and the supplier clearly show that the price was provisional. Further, in terms of Rule 5(1)(b) of the Customs (Appeals) Rules, 1982, the assessee is entitled to produce any evidence before the adjudicating authority, if that evidence was in existence - e-mails received from the supplier were after the Order-in-original was issued and therefore the respondent was justified in producing the same before the Commissioner(Appeals) who considered the same. There is no infirmity in the impugned order which is upheld by dismissing the appeal of the Revenue.

Summary

Issues:
Appeal against Commissioner(Appeals) order directing refund of excess duty paid by importer due to price variation in imported goods.

Analysis:
The appeal was filed by the Revenue against the Commissioner(Appeals) order directing the Department to refund the excess duty paid by the importer. The case involved the import of Phosphoric Acid in bulk by the importer from a supplier in Morocco. The importer self-assessed the Bills of Entry based on provisional unit price facilitated by the Risk Management System (RMS) without assessment or examination by the Department. The provisional unit price was USD 715 per MT, but the final price was USD 620 per MT, leading to excess duty payment of &8377; 47,04,817/-. The Department requested documents for final invoice value and unjust enrichment certificate, which the importer provided. The Additional Commissioner rejected the request to amend Bills of Entry under Section 149 of the Customs Act, leading to the appeal before the Commissioner(Appeals).

During the hearing, the Revenue argued that the impugned order was unsustainable, emphasizing that final invoices with the lower unit price were not submitted during goods clearance. The Revenue contended that the responsibility lies with the importer for accurate self-assessment and declaration. The Revenue also challenged the admission of new evidence by the appellate authority and the consideration of unjust enrichment beyond the scope of the original order.

On the other hand, the importer's counsel defended the impugned order, highlighting clauses in the sale and purchase agreement showing the provisional nature of the price and the Department's awareness of this fact during import. The importer argued that the duty was paid on the provisional price, and the refund claim was legitimate due to the finalized lower price. The importer cited Customs (Appeals) Rules allowing the production of new evidence and presented cases supporting their position on amendment to Bills of Entry.

The Tribunal, after considering both sides and the material on record, upheld the Commissioner(Appeals) order. The Tribunal found that the price was provisional, known to the Department, and stated as such during filing of Bills of Entry. The variation clauses in the agreement supported the provisional nature of the price. The Tribunal noted the importer's entitlement to produce evidence and justified the submission of supplier emails post the original order. The Tribunal also agreed with the Commissioner(Appeals) on the absence of unjust enrichment, as the excess duty was recorded as receivables and supported by a Chartered Accountant certificate. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the refund direction.

In conclusion, the Tribunal's detailed analysis considered the provisional nature of the price, the importer's actions, the legal provisions, and the absence of unjust enrichment, leading to the dismissal of the Revenue's appeal and affirmation of the refund order.