9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (3) TMI 856 - AT - CustomsRefund of Additional Duty of Customs - Requirement of Re-assessment before refund - principles of Unjust enrichment. Requirement of Re-assessment before refund - HELD THAT - The self-assessment done by Micromax while filing Bills of Entry would also amount to assessment. Micromax imported mobile phone handsets of CTH 8517 self assessed the Bills of Entry on payment of Additional Duty of Customs @ 6%/ 10%/ 12.5%. Thereafter they sought to claim the benefit of S. No. 263A of Notification No.12/2012 dated 17.03.2012 read with amendments and S. No. 132 of Notification no. 01/2011 CE dated 01.03.2011 as amended which would amount to re-assessment. Re-assessment is done under Sec 17 of Customs Act 1962 and without re-assessment of the said Bills of Entry the said benefit under Notification cannot be availed. The Refund Application is filled with the proper officer for refund i.e. Assistant Commissioner (Refund) who can only process the refund claim. The ITC judgement 2019 (9) TMI 802 - SUPREME COURT (LB) clearly says that It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27 . As per Law of Comity only the proper officer who has done the assessment or verification of Assessment (in case of self-assessed Bills of Entry) can only do the re-assessment. Micromax should have first opted for re assessment of the Bills of Entries and only then they should have filed refund application. Having missed the prescribed time lines it is held that Micromax is not eligible for the refund of Rs18.38 Cr Rs 35.89 Cr as claimed by them. The Hon ble Supreme Court in Mafatlal Industries Ltd. Versus Union of India 1996 (12) TMI 50 - SUPREME COURT has held that While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 - cannot be circumscribed by the provisions of the said enactments they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. Hon ble Supreme Court has time and again held in Priya Blue Industries Ltd. v. Commissioner 2004 (9) TMI 105 - SUPREME COURT and Collector v. Flock (India) Pvt. Ltd. 2000 (8) TMI 88 - SUPREME COURT that re-assessment of Bill of Entry is mandatory before filing refund. The Revenue was permitted to implead these additional ground on the basis of Supreme court decision in the case of ITC which was permitted vide Misc Order 50175-176/2023 dated 03.07.2023. Therefore it is not the case that Micromax was not aware that re-assessment of Bill of Entry was mandatory before filing the refund claims. The said benefit was not availed by the appellant at the time of filing of Bills of Entry under the belief that they do not fulfill the condition as the goods were imported and not manufactured in India and filed the self-assessed Bills of Entry claiming 6% ad valorem. This is evident from the fact that they had not paid duty under protest. However without seeking re-assessment or filing an appeal mere filing of refund claim cannot be entertained as laid down by the Hon ble Supreme Court in ITC judgment. Principles of unjust enrichment - HELD THAT - The concept of unjust enrichment is the retention of a benefit which is considered contrary to justice or equity. Further the assessment of Mobile phone was based on MRP and the goods are sold in the market accordingly on the basis of declared MRP which include duty components. Once the goods are assessed on declared MRP having duty component the incidence of duty is deemed to have been passed on to the buyer on sale of the same. Thus the incidence of Additional Duty of Customs @ 6% had already been passed and thus attracting the clause of unjust enrichment. The application was for amendment under Section 149 of Customs Act 1962 and not for re-assessment under Section 17. We are of the view that under Section 149 only amendment of factual details of Bs/E can be done but not the assessment or re-assessment which includes extending the benefit of Notification which is a quasi-judicial function. As per Section 17(5) re-assessment is possible for extending benefit of Notification but the time limit for such re-assessment is 60 days from the date of Out of Charge - Section 149 is for amendment of details on the basis of document evidence which was in existence at the time the goods were cleared. In the instant case it was extending of benefit of S. No. 263A of Notification No. 12/2012 dated 17.03.2012 read with amendments and S. No. 132 of N/N. 01/2011 CE dated 01.03.2011 as amended. The fact that importers are eligible for such benefit of Notification has come to light only after Hon ble Supreme Court judgment in the matter of SRF Ltd. 2015 (4) TMI 561 - SUPREME COURT which was delivered on 26.03.2015. This fact was not available at the time of filing/ OOC of Bs/E in June-July 2014. Conclusion - i) There is a necessity of reassessment before processing refund claims. ii) The doctrine of unjust enrichment applies barring refunds when the duty incidence is passed on to consumers. Appeal of Revenue dismissed.
1. ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include: (A) Departmental Appeals: i. The legality and propriety of the Order-in-Appeal no. CC(A)Cus/D-I/ACC-Import/Refund/NCH/664/2018-19 dated 11.02.2019, which held that the appellants are entitled to a refund of Rs.18.38 crores and remanded the case for a fresh order based on a CA certificate and other documents. ii. The legality and propriety of the Order-in-Appeal no. CC(A)Cus/D-I/ACC-Import/Refund/NCH/666/2018-19 dated 11.02.2019, which similarly held that the appellants are entitled to a refund of Rs.35.89 crores and remanded the case for a fresh order based on a CA certificate and other documents. (B) Party Appeals: i. The legality and propriety of the Order-in-Appeal no CC(A)Cus/D-I/Import/NCH/5130/2023-24 dated 01.03.2024, which allowed the Departmental appeal and set aside the impugned Order-in-Original No. 101/VP/2019 dt. 24.06.2019. ii. The legality and propriety of the Order-in-Appeal no CC(A)Cus/D-I/Import/NCH/5129/2023-24 dated 01.03.2024, which allowed the Departmental appeal and set aside the impugned Order-in-Original No. 102/VP/2019 dated 27.06.2019. 2. ISSUE-WISE DETAILED ANALYSIS A. Requirement of Re-assessment before Refund - Relevant Legal Framework and Precedents: The judgment in ITC Ltd. v. CCE Kolkata [2019 (368) ELT 216] emphasizes that a refund application cannot be processed without reassessment. Self-assessment is considered an assessment, and any aggrieved party must file an appeal for reassessment under Section 128 of the Customs Act. - Court's Interpretation and Reasoning: The Court held that the self-assessment done by Micromax amounts to an assessment. Without reassessment of the Bills of Entry, the benefit under the relevant notifications cannot be availed. - Key Evidence and Findings: The Court noted that Micromax did not file an appeal for reassessment of the Bills of Entry, which is a prerequisite for claiming a refund. - Application of Law to Facts: The Court applied the ITC judgment to conclude that the refund claim filed by Micromax without reassessment is not legal. - Treatment of Competing Arguments: The Court rejected the argument that the refund was not subject to reassessment, emphasizing the need for reassessment as per the ITC judgment. - Conclusions: The refund claims are not sustainable without reassessment, and the appeals based on such claims are dismissed. B. Unjust Enrichment - Relevant Legal Framework and Precedents: The doctrine of unjust enrichment prevents a party from retaining a benefit unjustly. The burden is on the claimant to prove that the duty has not been passed on to the consumer. - Court's Interpretation and Reasoning: The Court found that Micromax failed to demonstrate that the duty was not passed on to consumers, thus attracting the doctrine of unjust enrichment. - Key Evidence and Findings: The adjudicating authority's examination of balance sheets and CA certificates indicated that the duty had been passed on. - Application of Law to Facts: The Court concluded that the incidence of duty was passed on to the buyers, making the refund claim unsustainable. - Treatment of Competing Arguments: The Court rejected the argument that the refund was not subject to unjust enrichment, citing the lack of evidence to support the claim. - Conclusions: The refund claims are barred by unjust enrichment, and the appeals based on such claims are dismissed. 3. SIGNIFICANT HOLDINGS - The Court emphasized the necessity of reassessment before processing refund claims, as established in the ITC judgment. - The doctrine of unjust enrichment applies, barring refunds when the duty incidence is passed on to consumers. - The Court upheld the Departmental appeals, setting aside the Orders-in-Appeal that granted refunds without reassessment. - The Court dismissed the party appeals, affirming the Orders-in-Appeal that set aside the Orders-in-Original granting refunds. - The Court reinforced the principle that claims based on another party's judgment are not sustainable without independent reassessment. - Final Determinations: (A) In Departmental appeals: i) Order-in-Appeal no. CC(A)Cus/D-I/ACC-Import/Refund/ NCH/664/2018-19 dated 11.02.2019 is set aside, and departmental appeal C/51109/2019 is allowed. ii) Order-in-Appeal no. CC(A)Cus/D-I/ACC-Import/Refund/NCH/ 666/2018-19 dated 11.02.2019 is set aside, and departmental appeal C/51110/2019 is allowed. (B) In Party Appeals: i) Order-in-Appeal no CC(A)Cus/D-I/Import/NCH/5130/2023-24 dated 01.03.2024 is upheld, and party's appeal C/50824/2024 is rejected. ii) Order-in-Appeal no. CC(A)Cus/D-I/Import/NCH/ 5129/2023-24 dated 01.03.2024 is upheld, and party's appeal C/50825/2024 is rejected.
|
