2019 (6) TMI 80 - AT - Customs

Refund of excess customs duty - excess customs duty paid on account of imposition of 1% handling charges by the Customs authorities at the time of import of goods - the original authority rejected the refund claim mainly on the ground that the duty was paid by way of duty scrips which is not entitled to cash refund and secondly Notification 91/2017 dated 26.09.2017 is retrospective in nature. HELD THAT - The appellant filed a refund claim of excess payment of Customs duty on the basis of law declared by the Supreme Court in the case of WIPRO LTD. VERSUS ASSISTANT COLLECTOR OF CUSTOMS OTHERS 2015 (4) TMI 643 - SUPREME COURT wherein it was held that imposition of customs duty on adhoc 1% handling charges is bad in law. Further after the decision of the Supreme Court the Revenue issued a Notification 91/2017-Cus. dated 26.09.2017 amending the law on valuation imposing the adhoc handling charges. Further the CBEC vide Circular No. 39/2017 dated 26.09.2017 has clarified that the amendment to the Valuation Rules will be from retrospective effect. The Commissioner s (Appeals) directions to examine the claim of unjust enrichment when the matter has already been examined and decided in favour of the appellant and the Revenue is not under appeal on this aspect of the Order-in-Original is not tenable in law. The Commissioner of Customs (Appeals) cannot in its appellate jurisdiction review the order of the refund authority which is not in dispute and has attained finality - Further the finding of the Commissioner (Appeals) that the goods have not been cleared under protest and hence the refund application is not maintainable is clearly beyond the refund proceedings as the refund sanctioning authority has rejected the refund application only on the ground that Notification is prospective in nature. Moreover, the Commissioner (Appeals) failed to appreciate that Section 27 does not require that the goods should be cleared under protest for claiming refund of excess payment of duty. The matter is remanded to the original authority only for the purpose of verification of the documents and sanctioning of the refund - appeal allowed by way of remand.

Summary

Issues involved:
- Refund claim of excess customs duty paid on account of imposition of 1% handling charges by Customs authorities.
- Power of remand by Commissioner (Appeals) and applicability of Supreme Court decision in Wipro Ltd. case.
- Requirement of duty payment under protest for refund claim.
- Payment of duty through duty entitlement scrips and entitlement to cash refund.

Issue 1: Refund claim of excess customs duty:
The appellant imported Crude Sunflower oil and filed a refund application seeking refund of excess customs duty paid due to 1% handling charges imposed by Customs authorities. The original authority rejected the claim, stating that duty was paid through duty scrips, not eligible for cash refund, and that the notification amending valuation rules was prospective. The Commissioner (Appeals) remanded the matter for De novo adjudication, leading to the present appeal.

Issue 2: Power of remand and Supreme Court decision in Wipro Ltd. case:
The appellant argued that the Commissioner (Appeals) exceeded jurisdiction by remanding the case and that the Supreme Court decision in Wipro Ltd. case established that imposition of 1% handling charges violated Customs Act. The appellant contended that the decision was retrospective, as clarified by CBEC Circular, and that the Commissioner (Appeals) erred in directing a fresh examination of unjust enrichment, which had already been established.

Issue 3: Duty payment under protest for refund claim:
The appellant argued that duty payment under protest was not a requirement for filing a refund application, citing a Delhi High Court case. The appellant maintained that the duty payment through duty entitlement scrips should not disqualify them from a cash refund, as the scrips were tradable and could be used for duty payment during import.

Issue 4: Payment of duty through duty entitlement scrips:
The appellant contended that the duty payment through duty entitlement scrips should not preclude them from a cash refund, as held in various cases where Tribunals directed refunds to be paid in cash despite the use of DEPB scrips. The Tribunal found that the impugned order was not sustainable, set it aside, and remanded the matter to the original authority for verification of documents and refund sanctioning.

This detailed analysis of the judgment covers all the issues involved comprehensively, addressing the legal arguments and decisions made by the authorities involved in the case.