2019 (5) TMI 524 - AT - Customs

Claim of refund - Valuation of imported goods - Earlier, Commissioner of Customs (Appeals) allowed the appeal of the assessee directing to assess the goods at the declared value - HELD THAT - It is a undisputed fact that the appellant was asked to pay the amount of ₹ 3,23,433/- by the Customs Officer as differential duty and the same was paid vide Challan No. CM 133/07.05.2015 which is also placed on record. Further, after the payment of ₹ 3,23,433/- made by the appellant, he has written a letter dated 07.05.2015 to the Department explaining the reason for different modes of payment and the said letter has not been considered by both the authorities while deciding the case of the appellant. Further, the appellant also produced the Chartered Accountant certificate certifying the payment of the said amount as security deposit in respect of the Bill of Entry but the same has also not been considered. Further, both the authorities have not given any valid reason for retaining the said amount. The orders passed by both the authorities are silent with regard to appropriation of the said amount - The officers of the Department are duty bound to explain as to under which Head, the said amount has been allocated but no reason, whatsoever, has been given in both the orders as to the collection, appropriation, utilization of the amount collected from the appellant. The impugned order rejecting refund of the amount of ₹ 3,23,433/- is not sustainable in law - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of refund claim for security deposit made during provisional assessment.

Analysis:
The appeal was directed against the order of the Commissioner (Appeals) rejecting the appellant's appeal. The appellant filed a Bill of Entry for clearance of goods at a declared value. The proper officer proposed an enhancement based on NIDB data, leading to provisional assessment and payment of declared duty along with a security deposit. Subsequently, the assessable value was finalized at a higher rate. The appellant sought a refund of the security deposit, which was rejected on the grounds of non-appropriation towards the differential duty account. The appellant contended that all required documents were submitted, and the payment was certified by a Chartered Accountant. The authorities failed to explain the allocation of the amount collected from the appellant. The impugned order was challenged on legal grounds, citing precedents where duty collected without authority must be refunded to the assessee.

The Learned Counsel argued that the impugned order failed to appreciate facts and legal precedents. The Original Authority had found the refund application in order, yet the appellate authority rejected the appeal based on non-appropriation of the payment. The appellant's compliance with payment requests and submission of documents were highlighted. The appellant's letter explaining the payment modes and the Chartered Accountant's certificate were not considered by the authorities. The failure to explain the allocation of the collected amount was noted, along with the absence of valid reasons for retaining the sum. Precedents were cited to support the argument that unauthorized duty collection must be refunded with interest.

After considering submissions, the judge found the impugned order lacking proper appreciation of facts. The rejection of the refund claim was deemed unsustainable as the appellant had complied with payment requests and provided necessary documentation. The appellant's letter and the Chartered Accountant's certificate were crucial evidence overlooked by the authorities. The absence of explanations for retaining the amount collected and the failure to allocate the sum appropriately were noted. Relying on legal precedents, the judge set aside the impugned order, allowing the appeal and directing for the refund of the security deposit with any consequential relief.

In conclusion, the judgment favored the appellant, emphasizing the importance of proper appreciation of facts and legal precedents in such cases. The decision highlighted the necessity for authorities to explain the allocation of collected amounts and the obligation to refund unauthorized duty collections to the assessee.