2022 (4) TMI 86 - AT - Customs

Refund of tax and interest, collected without authority of law - availability of exemption benefit under N/N. 79/2017-Cus. - HELD THAT - The Commissioner (Appeals) has admitted that the benefit of exemption from IGST and cess was available to the appellant till 31.03.2018 under Notification No. 79/2017-Cus. It is found that the Court below have erred in holding that the exemption is not available to the appellant-assessee as the assessment/re-assessment of the Bill of Entry was finalised in September, 2018 (after 31.03.2018). The entitlement of exemption from duty on filing the Bill of Entry is with respect to the date of filing of the Bill of Entry. Thus, the exemption of IGST as well as BCD cess was available in respect of Bill of Entry, which was filed on 14.03.2018 and 31.03.2018. Further, the Government vide amending Notification No.01/2019-Cus. dt. 10.01.2019 have withdrawn the pre-import condition No. (XII) from Notification No.18/2015-Cus. in public interest. The Adjudicating Authority is directed to grant refund of ₹ 97,032/- alongwith interest as per Rule, within a period of 45 days from the date of receipt of copy of this order - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Interpretation of Notification Nos. 18/2015-Cus., 26/2017-Cus., and 79/2017-Cus.
2. Validity of pre-import conditions and their impact on duty exemption.
3. Claim for refund of IGST and interest paid without authority of law.
4. Applicability of exemption from IGST and compensation cess.
5. Date of entitlement for duty exemption based on the date of filing Bill of Entry.

Analysis:

1. The case involved the interpretation of various customs notifications, specifically Notification Nos. 18/2015-Cus., 26/2017-Cus., and 79/2017-Cus. These notifications granted exemptions from different duties for import of inputs under Advance Authorization for physical exports.

2. The issue of the validity of pre-import conditions and their impact on duty exemption arose in this case. The appellant faced investigation by the DRI for non-fulfillment of pre-import conditions, which led to the payment of IGST and interest to avoid harassment.

3. The appellant sought a refund of the IGST and interest paid without authority of law, amounting to ?97,032. The Deputy Commissioner initially proposed rejection of the refund claim on various grounds, including the timing of reassessment and lack of evidence regarding DRI investigation.

4. The question of the applicability of exemption from IGST and compensation cess was crucial in this case. The appellant argued that the collection of IGST without authority of law made the charging of interest on the same unjustified, leading to the claim for a refund.

5. The determination of the date of entitlement for duty exemption based on the date of filing the Bill of Entry was a significant aspect of the case. The Tribunal held that the exemption from IGST and compensation cess was available to the appellant based on the date of filing the Bill of Entry, not the date of finalization of assessment.

In conclusion, the Tribunal allowed the appeal, set aside the impugned order, and directed the Adjudicating Authority to grant a refund of ?97,032 along with interest within 45 days from the date of the order. The decision clarified the entitlement to duty exemption based on the date of filing the Bill of Entry and emphasized the importance of adhering to legal provisions regarding duty exemptions and refunds.