TMI Blog2006 (3) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... is the date on which the amount paid provisionally is credited in to the government treasury as duty and not the date on which refund order or refund cheque was issued. Accordingly, the Tribunal held that in the present case, although the refund order was issued on 31st January, 2001 and refund cheque was issued on 6th February, 2001, for the purposes of Section 28 of the Customs Act, the adjustment of duty took place on 12th February, 2001 when the amount lying in the provisional duty account was credited into the government treasury and, therefore, the show cause notice issued on 9th August, 2001 was within six months from 13th February, 2001 and hence valid. 6.The questions of law framed in the appeal have been modified by consent of the parties and the appeal is heard on the following refrained substantial questions of law:- "(a) Whether the expression 'relevant date' and 'date of adjustment of duty after the final assessment' in Section 28(3)(b) of the Customs Act means:- (i) the date on which the refund cheque is issued; or (ii) the date on which the duty paid provisionally is actually credited into the Government treasury; (b) Whether the Tribunal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he D.C. (contract cell) on 8th December, 2000. It was further stated that on presentation of the said order with the prescribed pre-receipt, the amount will be paid to the assessee. Accordingly, on presentation of the refund order with the pre-receipt, cheque for Rs. 42,71,267/- was issued to the assessee by the Customs authorities on 6th February, 2001. As regards the amount of Rs. 7,28,733/- retained by the Customs authorities towards the duty assessed finally, it appears that a challan was prepared on 9th February, 2001, but the said amount was actually credited to the Government treasury only on 12th February, 2001. 10.Subsequently, on 9th August, 2001 a show cause notice was issued to the assessee on the ground that the audit party has observed that the amyl alcohol imported by the assessee was neither plant and machinery/components nor it was raw material required for the maintenance of the plant and machinery and, therefore, clearance of amyl alcohol at concessional rate under the notification No. 90/94, dated 1st March, 1994 was erroneous. By the said show cause notice, the assessee was called upon to show cause as to why the less charged amount of Rs. 66,11,698/- and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 11th March, 2005 held that the relevant date of adjustment of duty for the purposes of computing the limitation period under Section 28 of the Customs Act would be the date on which the duty amount of Rs. 7,28,733/- was actually credited to the Government Treasury. Since the duty amount of Rs. 7,28,733/- lying in the provisional duty account was actually credited into the Government Treasury an 12th February, 2001, the Tribunal held that the six months limitation for issuance of show cause notice under Section 28 of the Customs Act would commence from 13th February, 2001. Accordingly, the Tribunal held that the show cause notice issued on 9th August, 2001 being within six months from 13th February, 2001, the same was within time. Challenging the aforesaid order, the assessee has filed the present appeal under Section 130 of the Customs Act. 15.To complete the narration of facts, it may be noted that in furtherance of the aforesaid order passed by CESTAT, the Customs authorities had issued a detention order on 10th June, 2005 to recover the demand confirmed by Order-in-Original dated 19-12-01. The assessee filed a writ petition bearing No. 1885 of 2005 in this Court challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment of duty under Section 28 of the Customs Act would be the date on which the amount lying in the provisional duty account is credited to the Government Treasury. He submitted that on a plain reading of Section 28(3)(b) read with Section 18(2)(a) of the Customs Act, it is abundantly clear that on refund of excess amount, the adjustment was complete and crediting the amount lying in the provisional duty account into the Government treasury was only a ministerial act. He submitted that after issuing the refund cheque on 8th February, 2001, the fact that the customs authorities took their own sweet time to prepare the challan on 8th February, 2001 and actually credited the duty amount from the provisional duty account into the Government treasury on 12th February, 2001 was wholly irrelevant for computing the period of limitation. Accordingly, Mr. Thakkar submitted that the limitation of six months commenced from 7th February, 2001 and, therefore, the show cause notice issued on 9th August, 2001 must be held to be time barred and all actions taken pursuant thereto are liable to be quashed and set aside. 19.Hr. Desai, learned Additional Solicitor General appearing on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that Section 28 of the Customs Act is clear and specific and there is hardly any need for further interpretation. 22.Apart from the aforesaid written submissions, Mr. Desai gave his propositions of law in writing which reads thus :- "(a) Section 28 of the Customs Act deals with three kinds of arrears with regard to duty, including provisional, which could be non-levy, short-levy and erroneous refund. The said concepts are not mutually exclusive and they can get intermingled. The erroneous refund of 28(3)(c) refers to, for example, when the duty is levied by Adjudicating Officer by appellant order, it is (Sic) (b) Section 28(3)(b) deals with the provisional assessments of duty. The final assessment reducing the duty and subsequently, it is noticed that the provisional duty was erroneously refunded. Section 28(3) (b) unlike section 28 (3)(c) refers to a short-levy and erroneous refund in respect of provisional duty. The sections 28(3)(b) and 28(3)(c) are conceptually different but both refer to erroneous refunds. (c) The 'provisional duty' and 'actual payment of duty' are two different accounting heads having different financial status, 'provisional duty' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Writ Petition No. 1885 of 2005. In that case, while quashing the detention notice issued by the respondents, this Court without going into the validity of the show cause notice had directed the Commissioner (A) to dispose of the appeal on merits expeditiously. Thus, in Writ Petition No. l885 of 2005 this Court was not called upon and in fact, this Court has not dealt with the issue regarding the validity of the show cause notice. Therefore, the proper course is to hear the present appeal regarding the validity of the show cause notice first before hearing the appeal on merits. The Commissioner (A) cannot once again decide the issue as to whether the show cause notice was time-barred or not, because, the Tribunal has already decided that issue and the very same issue is the subject matter of the present appeal. Accordingly, we reject the preliminary objection raised by the revenue. 26.We may now set out the provisions of the Customs Act that are relevant for deciding the questions raised in this appeal. "18. Provisional assessment of duty (1) .... (2) When the duty leviable on such goods is assessed finally in accordance with the provisions of this Act, then- (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion applicable for issuing notice, in the present case is six months from the 'relevant date of adjustment of duty'. 28.The question that falls for consideration in this appeal is, in the case of provisionally assessed goods what is the relevant date of adjustment of duty on finalisation of the provisional assessment? Is it the date on which the excess amount is granted/refunded to the assessee or is it the date on which the amount lying in the provisional duty account is transferred to the Government treasury ? Section 18 of the Customs Act provides complete answer to this question. It provides that in certain cases the proper officer may permit clearance of the goods on payment of duty as provisionally assessed and it further provides for the complete mechanism to be followed on finalisation of the provisional assessment. They are (a) in the case of goods cleared for home consumption, the amount paid provisionally shall be adjusted against the duty finally assessed, (b) after such adjustment, the amount that falls short of, or is in excess of the duty finally assessed be determined (c) if the amount paid provisionally falls short of the duty assessed finally, then call upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legislature intended that in the case of provisionally assessed goods, the relevant date for issuing show cause notice under Section 28 should be the date on which the amount lying in the provisional duty account is actually credited in to the Government treasury, then, it would have specifically stated so in Section 28(3)(b). It may be noted that under Section 28(3)(c), in case of erroneous refund, the relevant date specified is the 'date of refund'. Similarly, in cases covered under Section 28(3)(d) the relevant date is the 'date of payment of duty'. Therefore, when the legislature has consciously and distinctly used the word 'adjustment of duty' 'date of refund' and 'date of payment' to be the relevant dates in respect of the cases covered under Sections 28(3)(b), 28(3)(c) and 28(3)(d) respectively, it will not be proper to hold that the words 'relevant date of adjustment of duty' in Section 28(3)(b) to mean the date on which the amount lying in the provisional duty account is credited to the Government treasury. 32.As rightly contended by the learned Counsel for the assessee, the excess amount refundable to the assessee can be determined only when the duty payable on finali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra). In those cases, the Apex Court was considering the limitation prescribed in case of erroneous refund and not the cases covered under Section 28(3)(b) of the Customs Act. In other words, in those cases the Apex Court has considered the meaning of the word "date of refund"and the Apex Court was not called upon to construe the meaning of the word 'adjustment of duty'. Therefore, the ratio laid down by the Apex Court in the aforesaid cases has no relevance to the facts of the present case. Similarly, the ratio laid down by the Apex Court in the case of Jacsons Thevara (supra) has no relevance to the facts of the present case. 35.The contention of the revenue that the show cause notice is for recovery of the erroneous refund cannot be accepted. In the present case, the refund was issued after giving effect to the final assessment order. By the said refund order, the excess amount refundable on adjustment of the duty finally assessed has been quantified. There is no fault in determining the quantum of refund. Therefore, the amount refunded to the assessee cannot be said to be an erroneous refund. Till the show cause notice issued to the assessee culminates in setting aside or m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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