2024 (7) TMI 426 - HC - Customs

Refund of the additional duty paid under protest - Re-assessment of Ex-Bond Bills of Entry - Benefit of enhanced tariff value - Clearance of the said goods for home consumption - Section 68 of the Customs Act, 1962 - Petitioner had filed the said four Ex-Bond Bills of Entry claiming classification and duty structure as referred earlier, under Section 68 of the Act, seeking clearance of 3465.024 MTs of the said goods for home consumption - HELD THAT - Admittedly, in this case four Ex-Bond Bills of Entry have been presented before the said Notification came into force. One bill of entry was self-assessed on 13th May 2021 at 20 17 07 hours, the second was self-assessed at 20 56 11 hours, the third was self-assessed at 20 15 09 hours and the fourth was self-assessed at 20 59 08 hours, whereas, the Notification was e-gazetted on 13th May 2021 at 21 24 11 hours - the rate of duty that will be applicable will be USD 1163 PMT, which was in force when the four Ex-Bond Bills of Entry were presented. Reassessment orders are hereby quashed and set aside. In ITC Ltd. 2019 (9) TMI 802 - SUPREME COURT the Apex Court held that under Section 27 (2) (a) it is incumbent upon the applicant to satisfy that the amount of duty or interest of which refund has been claimed, had not been passed by him to any other person, the provision aims at preventing unjust enrichment. Petition allowed.

Issues Involved:

1. Classification and duty structure of imported goods.
2. Application of tariff value notification.
3. Re-assessment of Ex-Bond Bills of Entry.
4. Refund of additional duty paid under protest.

Detailed Analysis:

1. Classification and Duty Structure of Imported Goods:

The petitioner entered into four contracts for importing 12,250 Mts of Crude Palm Oil of Edible Grade in Bulk. The contracts were dated 31st March 2021, 5th April 2021, and 16th April 2021. The total quantity supplied was 12,127.577 Mts, covered under fourteen Bills of Lading dated 24th April 2021. The petitioner filed a Warehouse Bill of Entry on 7th May 2021 and subsequently filed various Ex-Bond Bills of Entry on 13th May 2021 under Section 68 of the Customs Act, 1962, seeking clearance for home consumption.

The petitioner classified the goods under Customs Tariff Heading 15111000 and applied the following duty structure: Basic Customs Duty @ 15%, Agriculture and Infrastructure Development Cess @ 17.5%, Social Welfare Surcharges @ 10%, and IGST @ 5%.

2. Application of Tariff Value Notification:

The petitioner valued the goods at USD 1163 PMT as per Notification No. 45/2021-Customs (N.T.) dated 30th April 2021. However, Notification No. 47/2021-Customs (N.T.) dated 13th May 2021, effective from 21:24:11 hours, increased the tariff value to USD 1219 PMT. The department sought to re-assess the Ex-Bond Bills of Entry based on the enhanced tariff value.

The petitioner argued that the conditions of Section 15 of the Act were fulfilled before the notification was e-Gazetted, and hence, the enhanced tariff value should not apply. The petitioner cited the Supreme Court's decision in Union of India & Ors. Vs. M/s G.S. Chatha Rice Mills & Anr., which held that the rate in force at the time of presentation of the bill of entry is applicable.

3. Re-assessment of Ex-Bond Bills of Entry:

The Ex-Bond Bills of Entry were self-assessed on 13th May 2021 before the notification was e-Gazetted. The department re-assessed the bills and demanded additional duty based on the enhanced tariff value. The petitioner paid the additional duty under protest.

The court noted that the Apex Court in Chatha Rice Mills (Supra) had established that the rate and value in force at the time of presentation of the bill of entry are applicable. The court rejected the department's argument that Section 15 does not reference time and upheld the petitioner's contention that the enhanced tariff value should not apply to the Ex-Bond Bills of Entry self-assessed before 21:24:11 hours on 13th May 2021.

4. Refund of Additional Duty Paid Under Protest:

The petitioner sought a refund of the additional duty paid under protest. The court allowed the petition in terms of prayer clauses (b) and (c), quashing the reassessment orders. The court directed the petitioner to file a refund application, which the proper officer must consider and dispose of within 12 weeks, following a personal hearing.

Conclusion:

The court held that the tariff value of USD 1163 PMT, in force at the time of the presentation of the Ex-Bond Bills of Entry, was applicable. The reassessment orders demanding additional duty based on the enhanced tariff value were quashed. The petitioner was directed to file a refund application for the additional duty paid under protest, which the proper officer must process within 12 weeks. The petition was disposed of accordingly.

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