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TMI Blog2007 (10) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... onded re-warehouse under Section 58 of the Customs Act, 1962 for the storage of imported Crude Petroleum without payment of duty on importation or re-warehousing during the relevant period and was engaged in storage of imported Crude Petroleum transported through pipelines under bonded movement from Vadinar (Gujarat) in their bonded tanks at Panipat refinery. 4. However, the facility of removal of petroleum and petroleum products without payment of Customs duty from one warehouse to another was withdrawn vide Notification No. 17/2004-C.E. (N.T.), dated 4-9-2004 read with Circular No. 8/2005-Cus., dated 14-2-2005 and Circular No. 9/2005-Cus., dated 15-2-2005 with effect from 15-2-2005. Owing to which the transfer of petroleum and petroleum products without payment of Customs duty from the warehouse at the port of import to inland warehouses and then pay the duty at destination was discontinued w.e.f. 15-2-2005 and the petroleum products lying in warehouses at places in the hinterland other than the ports were de-bonded from the Customs warehouses with realization of duty determined under Section 4 of the Central Excise Act, 1944 read with Valuation Rules. 5. However, since the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Authority also rejected the refund claim pertaining to remaining Bills of Entry No. 5. F-04 dt. 19-4-2004; 6. F-16 dt. 10-6-2004; 7. F-15. dt. 1-6-2004; 8. F-37 dt. 17-9-2003 9. F-54 dt. 9-2-2003 under Section 27 of the Customs Act, 1962. 8. Aggrieved with impugned order the Appellant filed the present appeal on the following grounds : (1) At the outset, the Appellant denies all the inconsistent sets of objections for rejecting the refund applications, which are not sustainable on the grounds, which are independent and are not prejudiced to each other. (2) That the contentions made for rejecting the refund applications by the Adjudicating Authority are denied and not admitted because the same are against the legislative law and the order is also illegal and against the facts and law, hence not sustainable. (3) In the said adjudication order, it is has been observed by the Adjudicating Authority that the refund applications has been filed after finalizing the concerned bills of entry directly without challenging the original assessment order. It was also contended by the Adjudicating Authority that Appellant should have filed an appeal against the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 117) E.L.T. 522 (Tribunal) Mafatlal Industries Ltd. v. Union of India-1997 (89) E.L.T. 247 (S.C.) Commandant Embarkation Headquarters v. Collr. of Cus., Bombay - 2000 (122) E.L.T. 532 (Tribunal) 10. From the above submission, it is clear that the refund claim has rightly been filed by the appellant, after the finalization of provisional assessment and the same is not disputed in any manner. The case referred by Adjudicating Authority is not applicable to the instant matter. In this case, it is not mandatory to challenge the assessment order but an assessment can be challenged by way of filing refund claim arising therein. The appellant in support of their claim, want to put some outstanding and recent legal pronouncements which are explained here under :- Refund (Customs) - Rejection on ground that refund claim cannot be entertained unless assessment appealed against - Refund became due because duty paid claiming classification of Refrigeration Testing Equipment under sub-heading 8421.99 of the Customs Tariff Act, 1975 but assessment made under sub-heading 8479.89 ibid attracting lower rate of duty - Since goods were assessed at lower rate of duty, importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an established provision that before rejecting the refund applications, a show cause notice should have been served to the appellant giving the grounds for rejection of refund applications filed by the appellants. But in the instant case neither such show cause notice was issued nor proper time for filing the grounds of admissibility of refund application was given to the appellant, which is against the legal statute as well as against the Principle of Natural Justice. 13. The appellant want to place here recent legal pronouncement which is elaborated here below :- Adjudication - Show cause notice - Absence of - Natural justice - Violation of - Order of Commissioner (A) treating Superintendent s letter as an administrative order and directing parties to follow instructions in the letter not justified - Impugned letter containing three proposals calls for issue of show cause notice so that appellants get an opportunity to challenge adjudication in a proper statutory appeal to Commissioner (A) - Proper officer shall issue requisite show cause notice to the party and proceed in accordance with law and principles of natural justice - Sections 33, 35A and 35C of Central Excise Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s authorities on Bill of entries. 19. As per Section 27(1)(b) of Customs Act, 1962, the refund claim was required to filed before the expiry of six months from the dated acknowledgment of receipt of final order because in this case, there has been provisional assessment u/s. 18(1) of the Customs Act, therefore, the limitation of six months shall be computed from the date of receipt of final assessment order, as stipulated in Explanation II to the Section 27(1)(b) of the Custom Act, 1962. 20. It is further stated that only assessment of bill of entries was not sufficient to calculate the period of limitation, but the date of limitation should start from the date of acknowledgement of order on bills of entry. 21. The matter has been elaborated with the strength of some prominent judgments :- Provisional assessment - Warehousing (Customs) - Refund - Limitation - in case of goods assessed provisionally, the assessee, on finalization of assessment, automatically entitled to refund of duty paid, in excess - Order rejecting refund claim on ground claim though filed within six month of finalization of assessment was barred by limitation as it was not filed within six months of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been no sanctioning of refund claim, there would have been no filing of refund claim and the only option left with the appellant would be to challenge the assessment of bills of entry. 25. The appellant want to explain here that so many years have been passed but the refund claims have not been sanctioned to us till now. Therefore, considering the above-mentioned grounds, the refund claims is admissible to the appellant with the appropriate interest. The appellant also want to clarify here that refund claim due must be disbursed within three months from date of application. If not so paid, Government will pay interest to the assessee at prescribed rates as per Section 11BB of the Central Excise Act, 1944 [parallel Section 27A of Customs Act]. It is further submitted that provisions of Section 11BB are attracted automatically for any refund not sanctioned within three months. The appellant also want to draw your kind attention to the Board s Circular No. 670/61/2002-CX, dated 1-10-2002 in which the following provision has been prescribed : - In this connection, Board would like to stress that the provisions of Section 11BB of Central Excise Act, 1944 are attracted automatical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir refund claim was not time-barred looking the date of communication of finalization of assessment order dated 17-3-2006 and the date of filing the refund claim being 26-5-2006 in this case. Similar is the position in r/o other three cases. This submission be considered for other three cases also involving the identical issue. 30. Discussion and Findings. 31. I have carefully gone through the facts of the case on record and the submissions made at the time of personal hearing. 32. The Appellant filed refund claim amounting to Rs. 1,71,13,709/- on 19-6-2006 on the ground that excess amount of duty of customs was paid by them on the importation of Crude Petroleum against the Following Bills of Entry-1. F-51 dt. 18-8-2000; 2. F-22 dt. 7-6-2001; 3. F-60 dt. 26-9-2001; 4. F-74 dt. 8-11-2001; 5. F-04 dt. 19-4-2004; 6. F-16 dt. 10-6-2004; 7. F-15. dt. 1-6-2004; 8. F-37 dt. 17-9-2003 9. F-54 dt. 9-12-2003. These Bills of Entry were assessed provisionally on account of pending some cost element, mainly Marine Insurance and Marine Freight. 33. The refund claim was filed as a result of finalization of provisional assessment of these Bills of entry. 34. Adjudicating Authority reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities where refund arises due to finalization of provisional assessment - Limitation not involved in either making recovery or giving refund - Section 18(2) of Customs Act, 1962. 38. Therefore the refund claim in respect of the said five Bills of Entry is not hit by limitation clause. The Adjudicating Authority rejected the refund claim on the ground that the Appellant did not go in appeal first against the assessment order and directly filed the refund claim which is not permissible as held by the Hon ble Supreme Court in the case of CCE, Kanpur v. Flock (India)-2000 (120) E.L.T. 285 (S.C.). 39. In the said case the issue involved was that if there is dispute regarding assessment-involving rate of duty, valuation, exemptions etc. as a result of which refund claim becomes due and which were not taken into account at the time of assessment, the refund claim cannot be filed directly without going in appeal against the said assessment order and that the refund sanctioning authority cannot sit in appeal over the assessment order passed by a competent authority. In the present case there is no dispute of assessment. The Appellant have not disputed the amount of duty chargeable or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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