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TMI Blog2023 (10) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... ISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] by the Hon ble Supreme Court being relied on heavily by the Revenue? - HELD THAT:- The AMAN MEDICAL PRODUCTS LTD. VERSUS COMMISSIONER OF CUSTOMS, DELHI [ 2009 (9) TMI 41 - DELHI HIGH COURT] decision pertains to pre-amendment provisions and has been held as not correct by the Apex Court in the ITC case. The Micromax decisions of 2016 and 2019 MICROMAX INFORMATICS LIMITED VERSUS UNION OF INDIA OTHERS [ 2016 (3) TMI 431 - DELHI HIGH COURT] and MICROMAX INFORMATICS LIMITED VERSUS THE UNION OF INDIA AND ORS. [ 2018 (12) TMI 802 - BOMBAY HIGH COURT] respectively considered the amended provisions of Section 27 to arrive at the decisions. During the period under dispute the importers were without doubt covered by these decisions since the ITC judgement was rendered by the Supreme Court subsequently. In these decisions, it was held in respect of self-assessed Bills of Entry, the importers were not even required to file any application for re-assessment as was being directed vide the Board Circular 24/2004 Cus dated 18.3.2004. These decisions had effectively overruled the Board Circulars - In the present case, by doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal under Section 128 and relies on the decision of ITC. Against this decision of Bombay High Court, the Revenue filed SLP, which has been dismissed by the Supreme Court as reported in COMMISSIONER VERSUS DIMENSION DATA INDIA PRIVATE LTD. [ 2022 (2) TMI 750 - SC ORDER] . Whether during the period under review the goods in question, Pisum Sativum [Peas] falling under Customs Tariff Heading 0713 10 00, are required to be assessed @ NIL rate of BCD in terms of Sl No.20 as claimed by the importers [two appellants and five respondents] or the goods are required to be assessed @50% rate of BCD in terms of Sl No.20A, as claimed by the Revenue? - HELD THAT:- During the period under dispute, in view of the amendment carried out under Notification No.29/2018 dated 1.3.2018, it is amply clear that the product under dispute fell both under for Sl No.20 and Sl No.20A during the period under question. If it were not to be so, there are no reason for the Revenue to bring in the amendment by way of this Notification No.29/2018 Cus dated 1.3.2018 at all. This is rather a case of ambiguity in the Taxation liability and not a case of ambiguity on account of exemption granted. The Revenue cannot den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and argued on behalf of the 2 Appellants and 5 Respondents. 2. Heard both side. Perused the written submissions made by both the sides. 3. The main grounds of Revenue's arguments can be summarized as under : A. Granting of refund of self-assessed Bills of Entry under Section 27 of the Customs Act is guided by the Supreme Court's decision in the ITC Ltd Vs CCE. The Larger Bench of the Supreme Court in this case has overruled the decisions of Aman Medical and Micromax Informatics. Hence, the granting of the refund relying on these decisions by the Commissioner (Appeals) is erroneous. B. Importers have not produced any evidence of getting the original assessment modified under Section 149 or Section 154 of the Customs Act 1962. But even filing any application under these Sections would not entitle them to file the refund claim under Section 27 of the Customs Act, 1962. C. The importers have relied on the case law of Sun Exports to canvass that in case of ambiguity the more beneficial rate would be applicable to them. This interpretation has been rejected by the Hon'ble Supreme Court vide their judgement in the case of Commissioner of Customs (Import) Mumbai Vs Dilip Kumar. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout it that the expression which was earlier used in Section 27(1)(i) that "in pursuance of an order of assessment" has been deleted from the amended provision of Section 27 due to introduction of provision as to self-assessment. However, as self-assessment is nonetheless an order of assessment, no difference is made by deletion of aforesaid expression as no separate reasoned assessment order is required to be passed in the case of self-assessment as observed by this Court in Escorts Ltd. v. Union of India &Ors. (supra). 41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. 42. It was contended that no appeal lies against the order of self- assessment. The provisionsof Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder : "128. Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re- assessment is not permitted nor conditions of exemption can be adjudicated. Re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their appeals, thereby their refund claims have been rejected. Agitated by these OIAs, the 2 importers are before the Tribunal. Out 2 importers, whose refund claims have been rejected, one importer, ETC Agro Processing (India) Pvt. Ltd. [ETC for short] filed a Writ Petition No. 1848 of 2021 before the Hon'ble Calcutta High Court for a direction regarding maintainability of their Refund Claim. While disposing of the Writ petition vide order dated 5.2.2021, the Hon'ble High Court held and observed that "the pendency of the Writ petition will however not prevent the concerned authority from passing an order in the petitioner's application for amendments of Bills of Entry, if any, made by the petitioners." b) In the light of the said observation of the Hon'ble High Court, the importer ETC pursued the application for amendment of their 4 Bills of Entry under Section 149 of the Customs Act 1962 which they had filed earlier. The Deputy Commissioner of Custom Appraising Group - I, Custom House, Kolkata videos his letter dated 28.04.2021, rejected the application/request for amendment of Bills of Entry. Referring to the Notification No. 93/2017-cus dated 21.12.2017 which included Pulses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months and filed the Refund claim on 28.9.2018 without the re- assessment being carried out by the Customs Authorities. This refund claim was rejected on 15.1.2019 by way of Order in Original on the grounds specified above. f) Similarly, it is submitted that all the other importers also had filed such re-assessment requests in terms of Section 149. In all such cases, they did not get any response. Such re-assessment requests were neither taken up for disposal, nor any communication was received as to why the requests are not being considered. Therefore, even they had no alternative, but to file the Refund claim without the re-assessment being done. g) The factual matrix proves that it is not the case where the importers have directly filed the refund claim, without seeking any re-assessment under Section 149. It is on record that such requests have been made through letters which are duly acknowledged by the Department. The learned Advocate submits that the very fact that they have approached the Customs authorities for re-assessment under Section 149, would nullify the Revenue's claim that the importer has not challenged the assessment of the Bills of Entry. It is erroneous t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined under Section 27, and Para 47 "and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. Thus the judgement only speaks of 'Modification' to be carried out to the self-assessed Bill of Entry 'modified under Section 128 or under other relevant provisions of the Act'. Therefore, there is absolutely no bar for the importer to seek re-assessment under Section 149. k) Without prejudice to the submissions that the importers have fully met the criteria of challenging the assessment by making a request for re- assessment, the Advocate also submits that during the period when the refund claims were filed, adjudicated and OIAs were passed, the appellants were fully supported by the decided case laws of various High Courts which were in force. At the time of filing the refund claims the importers followed the procedure as approved and considered as proper by various High Courts. The Board's Circular dated 18.03.2004 was time and again held as not applicable particularly in the case of self -assessed Bills of Entry. l) In this respect, reliance has been placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.29/2018 Cus dated 1.3.2018, they have noticed that the product was mentioned both at Sl No.20 as well as at Sl No.20A. (c) As per the interpretation of the importesr, they would be eligible to seek the refund of 50% BCD paid by them. (d) At that point of time, High Courts and Tribunals have been taking consistent view that in case of self-assessment, no Appeal or re-assessment is required and the refund claim can be directly lodged. However, the Board Circular 24/2004 Cusdated 18.3.2004 specified that re-assessment is pre-requisite if the refund claim is to be entertained. (e) The importers have filed their applications for re- assessment in terms of Section 149 of the Customs Act 1962 before the Appraising Authorities. While 6 of the importers have done so on their own, one party [ETC] had approached the High Court by way of Writ Petition. After the Writ Petition was disposed off by the High Court, they have filed their request letter under Section 149. [Page No.57-64 of the Synopsis] (f) The request of ETC was rejected on the ground that the goods were correctly assessed for BCD in terms of Sl No.20A of the Notification No.50/2017 Cus dated 30.6.2017. (g) The reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se an 'assessment order' in the context of Section 27(1)(i) as it stood prior to 8th April, 2011, particularly if such duty has not been paid under protest. In any event, after 8th April, 2011, as noticed hereinbefore, as long as customs duty or interest has been paid or borne by a person, a claim for refund made by such person under Section 27(1) of the Act as it now stands, will have to be entertained and an order passed thereon by the authority concerned even where an order of assessment may not have reviewed or modified in appeal. MICROMAX INFORMATICS LTD. Vs UNION OF INDIA 2019 (369) E.L.T. 543 (Bom.) 27. It can thus be seen that there have been significant statutory amendments in Sections 17 and 27 by virtue of the Finance Act, 2011. Earlier procedure of filing of bill of entry by importer and its assessment by the competent authority has been replaced by the self-assessment to be made by the importer while filing the bill of entry and the competent authority only passing a speaking order of reassessment in case where he finds that the self assessment made by the importer is not correct. It is therefore, that even in Section 27 of the Act, the procedure for claiming refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e itself has adduced argument to the effect that the importer should have resorted to Section 149 for re-assessment of the self- assessed Bills of Entry. In the present case, by documentary evidence the importers have proved that they have made the efforts to get the self-assessed Bills of Entry re-assessed as per the factual matrix observed above. 13. It leads us to the issue as to whether the re-assessment request under Section 149 would meet the requirement of filing of Appeal, because the Hon'ble Supreme Court in the ITC case cited supra has held that before the refund claim is entertained, Appeal has to be filed against the self-assessed Bills of Entry. This issue, including the Supreme Court's ruling in the case of ITC has been gone into in the following case : DIMENSION DATA INDIA PVT. LTD. Vs COMMISSIONER OF CUSTOMS 2021 (376) E.L.T. 192 (Bom.) 12. In reply, learned counsel for the petitioner has distinguished the decision of the Supreme Court in ITC Limited (supra) and submits that Central Government itself had issued notification way back on 02.05.2012 being Notification No. 40/2012 which was amended in the year 2017 by empowering offers of the rank of Deputy Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sess the customs duty leviable on the imported goods, a corresponding duty is also cast upon the proper officer to verify and examine such self-assessment. Such verification and examination have to be done in good faith and in the process of verification or examination if the proper officer finds that there is misclassification of tariff head or wrong classification of tariff head of the imported goods leading to lesser levy of customs duty or excess levy of customs duty, he has the power and authority under sub-section (4) to make re- assessment and re-assess the duty leviable on such goods. 15. From a careful analysis of section 149, we find that under the said provision a discretion is vested on the proper officer to authorise amendment of any document after being presented in the customs house. However, as per the proviso, no such amendment shall be authorised after the imported goods have been cleared for home consumption or warehoused, etc. except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, etc. Thus, amendment of the Bill of Entry is clearly permissible even in a situation where the goods are cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hewlett Packard Enterprise India Private Limited (supra) correctly held that in a case of correction of inadvertent error, the appropriate remedy would be seeking an amendment to the Bills of Entry and not fling of appeal because there is no legal flaw in the order of self-assessment amenable to appeal but only a factual mistake which can be rectified by way of amendment or correction. Such correction or amendment has been sought for by the petitioner on the basis of documents which were already in existence at the time of release of the goods for home consumption. 20. The expression "mistake" appearing in section 154 of the Customs Act may be defined as something done unintendedly or through inadvertence. The section itself says that the error in any decision or order should be due to any accidental slip or omission. Moreover, it can be a mistake of law or a mistake of fact. In all cases it need not be an arithmetical error alone. It may connote errors which can be discerned upon due verification. Having said so, we may also indicate that power to amend documents available under section 149 of the Customs Act read with correction of clerical or arithmetical mistakes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matrix proves that the importers have sought re-assessment under Section 149 as discussed in detail supra. In the only Order passed in respect of such a request, no ground was taken to the effect that against the self-assessed Bill of Entry only Appeal only under Section 128 should have been preferred. (c) As discussed supra, the importers have filed their request for re-assessment in terms of Section 149 [Page Nos.86 to 98 of the Synopsis]. In one case the request was rejected and in other cases, the Revenue did not respond. Hence, it is not a case where the importers have not sought to get the self-assessed Bills of Entry re-assessed. (d) In the Micromax 2019, the Revenue itself has argued that the importer could have got the self-assessed Bill of Entry re- assessed under Section 149. (e) The Mumbai High Court and Madras High Court have held that Section 149 can be used for re-assessment of self-assessed Bills of Entry. The SLP filed against the Mumbai High Court's decision has been dismissed by the Supreme Court. Hence, this issue has reached finality. 24. In view of these observations, we hold that in the present case the judgement of Hon'ble Supreme Court in the ITC cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h BCD @50%. After this, one more amendment was carried out vide Notification No.29/2018 Cus dated 1.3.2018. Here the scope of Sl No.20 was further expanded to read as "Pulses [Other than Peas (Pisum Sativum), Tur, Chikpeas or Masoor (Lentils)" with BCD @ NIL. The Sl No.20A continued to remain as it is with BCD @50%. 27. The learned Advocate submits that while the amendment vide Notification No.93/2017 Cus dated 23.12.2017 on its own does not grant the NIL rate of BCD to Peas [Pisum Sativum] with Sl No.20A being in place without any change, the further amendment vide Notification No.29/2018 Cus dated 1.3.2018 by bringing in Peas (Pisum Sativum) under the exceptions under Sl No.20 has given the scope to allow this product to be classified both under Sl No.20 and Sl No.20A during the period 23.12.2017 to 28.2.2018 [the intervening period]. The very fact that amendment was carried out on 1.3.2018 to bring in Peas (Pisum Sativum) under the exclusion list of Pulses under Sl No.20, clarifies that the goods were classifiable both under Sl No.20 and 20A during the period 23.12.2017 to 28.2.2018. If Sl No.20 and Sl.20A were to be two different and independent entities, then there would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bes the rate of tax, it is beyond doubt that the intention is to withdraw the exemption and make the sale liable to tax @ prescribed in the Notification. As the power both for grant of exemption and the variation of the rate of tax vests in the State Government and it is not the requirement of the statute that a Notification of Recall of Exemption is a condition president to imposing tax @ any prescribed rate by a valid notification under Section 3A, we see no force in the contention of the assesses which has been upheld by the High Court. In fact, the second notification can easily be treated as a combined notification- both for withdrawal of exemption and also for providing higher tax when power for both the operations vests in the State and the intention to levy the tax is clear we see no justification for not giving effect to the second notification." 30. While there is some force in the above argument, but going by the facts and number of amendments carried out to the basic Notification No.50/2017 Cus dated 30.6.2017, a harmonious reading of these Notifications does not suggest that Sl No.20A was withdrawn at any point of time but was in fact co-existing with Sl No.20. 31. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit. Therefore, non-consideration on the part of the Deputy Director General (Medical), DGHS to the prayer of the appellant in claiming exemption under category 3 of the notification is illegal and improper. The prayer ought to have been considered and decided on merits. Grant of exemption under category 2 of the notification or withdrawal of the said benefit cannot come in the way of the applicant in claiming exemption under category 3 if the conditions laid down thereunder have been fulfilled. The High Court also committed the same error and hence the order of the High Court also suffers from the same infirmity and is liable to be set aside. 20. In our opinion, the decision in Mediwell Hospitalwould not take away the right of the appellant to claim benefit under para 3 of the Table of exemption notification. If the appellant is not entitled to exemption under para 2, it cannot make grievance against denial of exemption. But if it is otherwise entitled to such benefit under para 3, it cannot be denied either. The contention of the authorities, therefore, has no force and must be rejected. COMMISSIONER OF C. EX., MEERUT Vs MODI XEROX LTD 2012 (275) E.L.T. 406 (All.) 15. It ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her, the High Courts and Tribunals have been consistently taking the view that the assessee is entitled for the more beneficial Notification, if there are two Notifications on the same issue. The ratio laid down in these case laws are squarely applicable to the facts of the present proceedings. In the present case, we observe that during the period 23.12.2017 to 28.02.2018, the goods in question Peas [Pisum Sativum] was present both in Sl No.20 and Sl No.20A of the basic Notification No.50/2017 Cus dated 30.6.2017 till the amendment vide Notification No.29/2018 Cus dated 1.3.2018 was carried out. Applying the case laws cited supra, the importers would be eligible to claim NIL rated BCD and file the consequent Refund claim. Accordingly, we hold that the importers have correctly sought Refund claim on the ground that they were not required to pay 50% BCD in the first place. 35. Coming to the third issue, Revenue has also taken the alternate argument that even if it is taken that the goods in question fall under both Sl No.20 and Sl No.20A of the Notification No.50/2017 Cus dated 30.6.2017 after the amendments, still the case law of CC (Imports) Mumbai Vs Dilip Kumar & Company - 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in an exemption notification should be construed in favour of the subject. In subsequent cases, this Court diluted the principle saying that mandatory requirements of exemption clause should be interpreted strictly and the directory conditions of such exemption notification can be condoned if there is sufficient compliance with the main requirements. This, however, did not in any manner tinker with the view that an ambiguous exemption clause should be interpreted favouring the revenue. Here again this Court applied different tests when considering the ambiguity of the exemption notification which requires strict construction and after doing so at the stage of applying the notification, it came to the conclusion that one has to consider liberally. 28. With the above understanding the stage is now set to consider the core issue. In the event of ambiguity in an exemption notification, should the benefit of such ambiguity go to the subject/assessee or should such ambiguity should be construed in favour of the revenue, denying the benefit of exemption to the subject/assessee? There are catena of case laws in this area of interpretation of an exemption notification, which we need to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubted the conclusion in Sun Export Case (supra) that the ambiguity in an exemption notification should be interpreted in favour of the assessee. 41. After thoroughly examining the various precedents some of which were cited before us and after giving our anxious consideration, we would be more than justified to conclude and also compelled to hold that every taxing statute including, charging, computation and exemption clause (at the threshold stage) should be interpreted strictly. Further, in case of ambiguity in a charging provisions, the benefit must necessarily go in favour of subject/assessee, but the same is not true for an exemption notification wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State. 43. There is abundant jurisprudential justification for this. In the Governance of rule of law by a written Constitution, there is no implied power of taxation. The tax power must be specifically conferred and it should be strictly in accordance with the power so endowed by the Constitution itself. It is for this reason that the Courts insist upon strict compliance before a State demands and extracts money from its citizens towards vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , should the benefit of such ambiguity go to the subject/assessee or should such ambiguity should be construed in favour of the revenue, denying the benefit of exemption to the subject/assessee? Be that as it is, in our country, at least from 1955, there appears to be a consistent view that if the words in a taxing statute (not exemption clause) are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject and it does not matter if the taxpayer escapes the tax net on account of Legislatures' failure to express itself clearly (See the passage extracted hereinabove from Kesoram Industries case (supra)). It is the law that any ambiguity in a taxing statute should enure to the benefit of the subject/assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of revenue - and such exemption should be allowed to be availed only to those subjects/assesses who demonstrate that a case for exemption squarely falls within the parameters enumerated in the notification and that the claimants satisfy all the conditions precedent for availing exemption. Further, in case of ambiguity in a charging provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs attached at column 6 till 7.11.2017. Vide amending Notification No.84/2017 Cus dated 8.11.2017, Sl No.20A was inserted and Column 4 was modified to specify 50% BCD still without any condition being specified at Column 6. Notification No.93/2017 Cus dated 23.12.2017 increased the scope of exception provided for items described at Column No.3. Subsequently the amending Notification No.29/2018 Cus dated 1.3.2018 was brought in expanding the scope of exception provided for items described at Column 3, wherein Pisum Sativum was specifically excluded which clarifies that it was also still available at Sl No.20 at column 3 earlier. 39. In the Notification No.50/2017 Cus dated 30.6.2017, it can be seen that in respect of several goods, Conditions have been specified at Col.6. Such conditions are listed under the Annexure attached to this Notification. In case of these goods, the importer is required to fulfil the condition given therein, in order to avail the concessional rate of BCD / IGST. These conditions may be like 'Undertaking to be given before the Dy Commissioner' or ' Certificate to be produced'. In the past, the fulfilment or otherwise of these conditions were a matter of li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her modified on 1.3.2018 to include Pisum Sativum in the exclusion list, it would clarify that this product was very much part of both Sl No.20 and Sl No.20A. 41. It is also not the case of the Revenue that any Condition has been specified if NIL rate is to be applied and in the event of non-fulfillment of such condition, the BCD will be levied @ 50%.Therefore, we conclude that during the period in question the Notification itself specifies two Effective Rates of 50% and NIL rate. This has resulted in ambiguity about as to whether the Taxing provision in this case is NIL or 50% BCD. As a matter of fact,the importers are not availing any exemption, but taking recourse to lesser Tax liability as per the Effective Rates specified in the Notification, which is beneficial to them, for which they are eligible to do so as held in the case laws discussed supra. The case law of Dilip Kumar, in fact helps the importer rather than the Revenue. 42. Hence, we do not agree with the arguments of the Revenue that the case law of Dilip Kumar would be of any help to them so as to overcome the dual rates of BCD specified during the period in question. The Notification No.50/2017 Cus dated 30.6.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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