2023 (6) TMI 1255 - AT - Customs

Refund of Customs Duty paid - Assessment of Bill of Entry not challenged - Import of non-coking coal in bulk - assessable value was worked out by adding 2% of CIF value on high seal sales load at the time of assessment of import of goods, which the assessee wanted to be re-assessed by adding Rs.33/- per M.T. - whether the incidence of duty has been passed on to the ultimate consumer? - Right to appeal. HELD THAT - Value addition, if any, as prescribed under Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, could always be a point of dispute since a claim for such addition by an importer needs to be supported by documentary evidence, to the satisfaction of the adjudicating authority. Further, the satisfaction of the assessing officer / adjudicating authority is paramount since he is the proper officer under the statute who is to be satisfied in the first place as to such claims by an importer. Hence, these aspects could only be considered during adjudication proceedings and not in any other proceedings. It is the settled position of law that the right to appeal is available to an assessee as well as the Department, even against self-assessment; until and unless the self-assessment is modified and the duty thereafter is re-determined, no application would lie for refund of any duty from such self-assessment since the refund authority cannot assume the role of an adjudicating / assessing authority. This is because the scope of refund is limited as against the scope of adjudication proceedings and hence, the authority considering any refund application cannot revisit the adjudication proceedings for which he has no jurisdiction. This is also in view of separate statutory provisions being provided for, for both refund as well as adjudication proceedings. The Hon ble Supreme Court in the case of M/s. ITC Ltd. 2019 (9) TMI 802 - SUPREME COURT has held that even an order of self-assessment is an order against which an appeal would lie, provisions of Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill-of-entry and that refund proceedings are in the nature of execution for refunding amount. The refund application is clearly not maintainable by applying the ratio decidendi in M/s. ITC Ltd. - Appeal of Revenue allowed.

Summary

Issues Involved:
1. Eligibility for Refund of Customs Duty
2. Applicability of Rule 10(3) and Rule 10(4) of Customs Valuation Rules, 2007
3. Consideration of High Sea Sales Commission/Trade Margin
4. Unjust Enrichment
5. Validity of Self-Assessment and Appeal Process
6. Compliance with Board Circulars

Summary:

1. Eligibility for Refund of Customs Duty:
The assessee filed seven refund claims for the Customs Duty paid on the import of 'non-coking coal in bulk.' The duty was calculated by adding 2% of the CIF value, which the assessee wanted to be re-assessed by adding Rs.33/- per M.T. as trade margin. The adjudicating authority rejected the claims due to lack of documentary evidence proving that the claims were not hit by unjust enrichment under Section 27(2) of the Customs Act, 1962. However, the first appellate authority allowed the refund claims, noting that the relevant purchase order/invoice showing the payment of high sea sales commission charges was not considered by the adjudicating authority.

2. Applicability of Rule 10(3) and Rule 10(4) of Customs Valuation Rules, 2007:
The first appellate authority observed that the adjudicating authority did not consider the provisions of Rule 10(3) and Rule 10(4) of the Customs Valuation Rules, 2007. The Revenue argued that these rules were not applicable for an order under Section 17 of the Customs Act, 1962, and that the importer should have filed an appeal against the order passed under Section 17.

3. Consideration of High Sea Sales Commission/Trade Margin:
The first appellate authority referenced Board Circular No. 32/2004-Cus. dated 11.05.2004, which clarified that the adjudicating authority must adopt the high sea sales commission/trade margin. The adjudicating authority, however, noted that the trade margin of Rs.33/- per M.T. was not demonstrated by the importer, and the cargo was assessed based on the price formula set forth in the purchase orders.

4. Unjust Enrichment:
The adjudicating authority found that the importer did not provide any documents to support the claim that the burden of duty was not passed on to the ultimate consumers. The first appellate authority directed the assessee to produce all relevant documents to prove that the incidence of duty was not passed on to the buyers.

5. Validity of Self-Assessment and Appeal Process:
The Revenue argued that the addition of 2% to the assessable value was voluntary and not in terms with Board Circular No. 32/2004. The self-assessed Customs Duty was accepted and paid without protest, making the refund claims contrary to an order that had attained finality. The Hon'ble Supreme Court in ITC Ltd. held that even an order of self-assessment is appealable, and refund proceedings cannot revisit the adjudication proceedings.

6. Compliance with Board Circulars:
The Revenue cited Board Circular No. 24/2004-Cus. dated 18.03.2004, which clarified that without a challenge to the assessment order, any refund claim was not maintainable. The adjudicating authority and the Revenue relied on multiple decisions, including ITC Ltd. and Priya Blue Industries, to support their stance that the refund application was not maintainable.

Conclusion:
The Tribunal found that the refund application was not maintainable as it indirectly challenged the assessment order. The direction of the first appellate authority to issue a refund was deemed unsustainable. The appeal of the Revenue was allowed, and the order of the original authority was restored.