2021 (8) TMI 622 - HC - Customs

Seeking amendment in the bills of entry - non-availability of the decision in the case of M/S SRF LTD., M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS, CHENNAI, COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) , NEW DELHI 2015 (4) TMI 561 - SUPREME COURT at the time of the clearance of the goods pertaining to the Bills of Entry in the present case - re-assessment, pertaining to a different period has not been considered by the 2nd respondent - assessment of the Bills of Entry - appealable order or not - HELD THAT - It provides a remedy of appeal against any order passed by the Dy. Commissioner of Customs, who is lower in rank than a Commissioner of Customs, to the Commissioner (Appeals) - the petitioner has a remedy of an appeal against the assessment of the BoEs in question. So Sec.149 is an additional remedy available to the petitioner to seek amendment of the BoEs subject to the condition that such amendment is sought on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported as the case may be In the decision of the Supreme Court in ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT while holding that the refund cannot be granted by way of a refund application under Section 27 of the Act until and unless an assessment order is modified and a fresh order of assessment is passed and duty re-determined, the Supreme Court nowhere said that such amendment or modification of an assessment order can only be done in an Appeal under Section 128 - thus, even the Supreme Court clearly indicated that the modification of the assessment order can be either under Section 128 or under other relevant provisions of the Act i.e. Section 149. The stand of the respondents in the counter affidavit that only reassessment under Section 128 is the remedy available to the petitioner, and Section 149 cannot be invoked, is not tenable - the plea of the 2nd respondent that there is no possibility of getting modified an order of assessment under any other relevant provision and that petitioner is trying to overcome limitations stipulated in Section 128 is also rejected. The Assessing Authority has failed to consider the fact that Section 149 of the Act does not prescribe any time limit for amending the Bill of Entry filed and assessed. The power to amend under Section 149 of the Act is a discretionary power vested with the authority. Since, it is due to incorrect determination of duty by the assessing authority initially, the petitioner is compelled to seek amendment of Bill of Entry under Section 149 of the Act. Thus, the importer / petitioner cannot be penalized for what the authority ought to have done correctly by himself. The impugned order passed by the 2nd respondent cannot be sustained and is violative of Articles 14, 19(1)(g), 265 and 300A of the Constitution of India and also the Customs Act, 1962, and it is accordingly set aside - petition allowed.

Summary

Issues Involved:

1. Eligibility for concessional Countervailing Duty (CVD) rate under the Exemption Notification.
2. Amendment of Bills of Entry (BoEs) under Section 149 of the Customs Act.
3. Refund of excess duty paid under Section 27 of the Customs Act.
4. Applicability of Supreme Court judgments to the case.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional CVD Rate under the Exemption Notification:

The petitioner, a private limited company engaged in the import of mobile phones, classified the imported goods under Customs Tariff Item No.8517 12 90 and paid CVD at 6% as per Sl.No.263A(i) of Notification No.12/2012-CE. However, the Exemption Notification allowed a concessional rate of 1% CVD under Sl.No.263A(ii) if no credit was availed on inputs or capital goods. The petitioner did not claim this exemption initially due to the 2nd respondent's interpretation that such exemption was not available to importers who procured inputs and capital goods outside India. The Supreme Court in M/s. SRF Limited vs. Commissioner of Customs (2015) clarified that importers could avail the lower rate if they could not claim CENVAT credit, making the petitioner eligible for the 1% CVD rate.

2. Amendment of Bills of Entry (BoEs) under Section 149 of the Customs Act:

The petitioner sought to amend 136 BoEs under Section 149 of the Customs Act based on the Supreme Court's decision in SRF Ltd., which clarified the eligibility for the concessional CVD rate. The 2nd respondent rejected this request, arguing that the Supreme Court's judgment was not in existence at the time of the goods' clearance and that the assessment of BoEs had attained finality. The court held that Section 149 allows for the amendment of BoEs based on documentary evidence existing at the time of clearance, and the Supreme Court's decision should be considered as clarifying existing law, not introducing new benefits.

3. Refund of Excess Duty Paid under Section 27 of the Customs Act:

The petitioner contended that once the BoEs were amended to reflect the 1% CVD rate, it would be eligible for a refund of the excess duty paid under Section 27 of the Customs Act. The 2nd respondent argued that refunds could only be claimed if the BoEs were reassessed under Section 128. The court clarified that the Supreme Court in ITC Ltd. vs. Commissioner of Central Excise (2019) allowed for modification of assessment orders under Section 128 or other relevant provisions, including Section 149. Therefore, the petitioner's request for amendment under Section 149 was valid, and upon amendment, the petitioner could seek a refund.

4. Applicability of Supreme Court Judgments to the Case:

The 2nd respondent's rejection of the amendment request was partly based on a previous decision by the Commissioner (Appeals), which was prior to the Supreme Court's decision in ITC Ltd. The court emphasized that Supreme Court judgments are binding and applicable retrospectively unless specified otherwise. The court rejected the 2nd respondent's view that the SRF Ltd. decision was not applicable because it was delivered after the goods were cleared. The court also noted that the Commissioner (Appeals) decision was under challenge and had not attained finality.

Conclusion:

The court held that the 2nd respondent's order rejecting the amendment request was unsustainable and violated constitutional provisions and the Customs Act. The court issued a Writ of Mandamus directing the 2nd respondent to amend the BoEs to reflect the 1% CVD rate within four weeks, enabling the petitioner to claim a refund of the excess duty paid. The court emphasized that the assessing authority should have correctly determined the duty initially and that the petitioner should not be penalized for the authority's failure. The Writ Petition was allowed, and miscellaneous petitions were closed.