Commissioner Of Customs, Central ... vs Ilc Industries Ltd

C/559/2009-DB [Arising out of Order-in-Appeal No. 06-2009 dated 17/06/2009 passed by Commissioner of Customs & Central Excise (Appeals), GUNTUR ]

For approval and signature:

HON'BLE SMT ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Es 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Commissioner of Customs, Central P.B.NO. 331...C.R.BUILDING, KANNAVARI THOTA, GUNTUR, - 520004 ANDHRA PRADESH Appellant(s)

Versus

Ilc Industries Ltd Near Industrial Estate, Dam Road HOSPET - 583203 KARNATAKA Respondent(s)

Appearance:

Mr. N. Jagadish, A.R. For the Appellant

Mr. M.S. Nagaraja, Adv For the Respondent

Date of Hearing: 15/07/2015

Date of Decision:

CORAM:

HON'BLE SMT ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

Final Order No. 21750 / 2015

Per : ARCHANA WADHWA

Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal. We have heard Shri N. Jagadish, learned A.R. for the Revenue and Shri M.S. Nagaraja, learned advocate for the respondents.

2. As per facts on record, the respondent filed a shipping bill dated 11.07.2008 for export of iron ore lumps by declaring per MT value of the same. As in terms of the contract, the respondent was to get US$ 128.70 towards export duty, Revenue entertained a view that the said duty is required to be added in the assessable value of the goods even though appellant claimed exemption of export duty from the total assessable value. The Assistant Commissioner Vide his Order No. 4/08 dated 11.07.2008, directed the respondent to pay export duty on the total value inclusive of the duty. The respondent accordingly paid the differential amount of Rs 61,92,672/- and Rs 18,708/- under protest.

3. In the meanwhile, the CBEC vide its circular dated 10.11.2008, clarified that valuation for calculating export duty is to be done by adopting FOB as cum-duty price. Based upon the same, the respondent filed refund of excess paid export duty of Rs 39,16,281/-. The said refund claim of the respondent was rejected by the original adjudicating authority on the sole ground that the assessee has not challenged the assessment order and as such in terms of the law declared by the Honble Supreme Court, refund cannot be entertained.

4. On an appeal, against the above order, Commissioner (Appeals) took note of the fact that the order of Assistant Commissioner was not a final order inasmuch as he has observed that the order of Assessment of duty is subject to reassessment under Section 17(4) of the Customs Act 1962, He observed that inasmuch as the assessing authority has passed a conditional order subject to reassessment under Section 17(4) of the Customs Act, he cannot turn around and hold to the contrary that the assessment was finalized. He also took note of the fact that the differential duty was paid under protest and further observed that in terms of the Boards Circular No. 18/08 dated 10.11.2008, there was a direction to the assessing authorities to finalize all pending assessment and as such it was incumbent upon the Assistant Commissioner to have suo moto reassessed the goods under Section 17(4) of the Customs Act. He accordingly by referring to various decisions allowed the appeal.

5. The said order stands appealed against by the Revenue.

6. It is seen that there is no dispute about the merits of the case. The only reason adopted by the Revenue for denial of the refund is that the assessment order No. 4/2008 dated 11.07.2008 passed by the Assistant Commissioner was not challenged by the assessee before the higher appellate forum and as such the same had attained finality. Any refund arising out of the said order cannot be entertained individually.

7. As such, it becomes necessary to refer to the said order No 4/2008 dated 11.07.2008. The operative portion of the said order is as follows:-

I hold that M/s ILC Industries Ltd, Hospet are liable to pay export duty of Rs. 4,74,87,851/- on the transaction value of Rs. 31,65,65,670/- in respect of Shipping Bill No. 42/2008-09 dated 11.7.2008. It is also ordered the order of assessment of duty is subject to reassessment under Section 17(4) of the Customs Act, 1962 in case there is any change in the Fe content and moisture content resulting in realization higher amount at FOB/assessable value without prejudice any other action that may be taken under provisions of law. The amount of Rs 4,12,95,178/- already paid by the Exporter vide TR 6 challan no. 11/08-09 dated 11-07-2008 is appropriated towards the above duty liability.

8. As is seen from above, The Assistant Commissioner has observed that the order of assessment would be subject to reassessment in terms of Section 17 (4) of the Customs Act, in case there is any change in the Fe content and moisture content resulting in realization of higher amount. As such it is apparent that the assessment was subject to the outcome of the customs examination report in regard to moisture and iron content. Once an assessment is kept open, and resultantly provisional, the same would be provisional for all the aspects. It cannot be said that the assessment was finalized vis-a-vis a legal issue of addition of export duty in the assessable value and was provisional for the other aspects. Such assessment has been rightly held to be not a final assessment by the Commissioner (Appeals). Decisions of the Honble Supreme Court in the case of Collector of Central Excise Kanpur Vs Flock India Pvt. Ltd. [2000 (120) ELT 285 (S.C.) as also in the case of Priya Blue Industries Vs CC [2004 (172) ELT 145 (SC)] laying that refund cannot be filed directly without putting a challenge to the assessment order are not directly applicable to the facts of the present case.

The same relate to a situation where there was a lis between the assessee and the Revenue and that lis stands finally adjudicated in the adjudication order. When the order of assessment itself says that the same is open to reassessment, the assessee can admittedly file the refund claim by praying for reassessment of the order, which the Assistant Commissioner has himself allowed. The non-challenge to such an order, before filing the refund claim, would not act as rebuttal to the assessees claim. As such we agree with the order of the Commissioner (Appeals) that inasmuch as the assessment order was a conditional order and was not a final assessment order, the assessee would be entitled to the claim of refund of the excess duty paid in terms of the said order without challenging the conditional order. Appellants reliance on the Tribunals order passed in the case of CCE Guntur Vs Muneer Enterprises & Ors (Final Order No. 1071-1075/2010) dated 15.07.2010 is appropriate. The facts involved in the said decision are identical to the facts of the present case. By taking note of various precedent decisions, the bench held in favour of the assessee.

The said decision of the Tribunal stands confirmed by the Honble Supreme Court of India when the appeal filed by the Revenue was dismissed vide their order dated 24.1.2011. Inasmuch as the identical facts are involved in the present appeal and we have also independently come to a conclusion against the Revenue, we find no justifiable reason to interfere in the impugned order of Commissioner (Appeals).

9. The issue of inclusion of export duty in the assessable value of the final product to be exported is not in dispute and also stands settled by the Boards Circular dated 10.11.2008. As such we agree with the appellate authority that the differential excess duty paid by the respondent is required to be refunded to them.

10. In view of the above, we reject the Revenues appeal.

(Order pronounced in open court on )

ASHOK KUMAR ARYA TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER

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