M/S. Ceat Limited vs Commissioner Of Customs, Kolkata

(Arising out of Order-in- Original/Appeal No. dtd. passed by the Commissioner of Central Excise & Customs )

For approval and signature:

Honble Mr. P.S. Pruthi, Member(Technical) Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. CEAT Limited : Appellants

VS

Commissioner of Customs, Kolkata : Respondent

Appearance

Shri. Narendra Dave, CA for the Appellants Shri. Chatru Singh, Asst. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 6/8/2015 Date of decision: /2015

ORDER NO.

Per : P.S. Pruthi

The appellant is in appeal against the rejection of refund claim.

2. The appellant imported natural rubber. CVD equivalent to cess was paid by them in respect of four Bills of Entry dated February, 2003. However, various judgments including those by the Apex Court held that Cess is not payable on the imported rubber. Therefore appellant filed refund claim on 4/9/2003 against duty already paid by them. Asstt. Commissioner held that the refund is not admissible because (i) the assessment made on the Bills of Entry were appealable and had attained finality, no appeal having been filed. (ii) In some cases the refund were time barred and (iii) all cases were hit by unjust enrichment. Ld. Commissioner (Appeals) upheld the order of the Asstt. Commissioner.

3. It is the plea of the Ld. Counsel that in terms of the Delhi High Court judgment in case of Aman Medical Products Ltd. Vs. CCE[2010(250) ELT 30 (Delhi)], refund claims are admissible when there is no assessment order on dispute as in the present case. It was also argued by the Ld. Counsel that in terms of the Section 154 of the Customs Act, time limit does not apply when a refund claim arises out of correction of clerical errors. He relied on the case of Keshari Steel Vs. Collector[2000(111) ELT 320], which was confirmed by the Honble Supreme Court on 1/12/1997 in SLP CC 8715/1997. He also relied on the case of Benet Coalman and Company Vs. Commissioner [2008(232)ELT 367] which held that assessment by the assessing officer resulting in payment of duty when the goods were exempted, is a case of sheer omission on the part of the assessing officer. As regards the unjust enrichment, the Ld. Counsel contended that they had submitted a Certificate from the cost accountant certifying that the amount of cess was not charged in the profit and loss account as expenses, rather it is show as Cess recoverable.

4. On the other hand, Learned A.R. appearing on behalf of Revenue states that application for refund is not maintainable without challeng to the assessment order as held by the Apex Court in the case of Priya Blue Industries Ltd. Vs. CC [2004(172) ELT 145(S.C.)]. He also relied upon Honble Supreme Court Judgment in the case of Escort Ltd. Vs. UOI[1998(97) ELT 211(S.C.) which held that the order of assessment on the Bill of Entry is itself an order of assessment and therefore the limitation period will apply from the date on which duty was paid. He also relied on Board Circular No. 24/2004 dated 18/3/2004 and case of AVA Food Ltd. Vs. Commissioner [2007-TIOL-894-CESTAT]. As regards the time bar aspect, he stated that in the case of Union of India Vs. Kirloskar Pneumatic Company[1996(84) ELT 401(S.C.)] it was held that Customs Authority could not be directed to ignore or act contrary to Section 27 of the Customs Act. Lastly on the aspect of unjust enrichment, he stated that CA certificate has been submitted well after the order in appeal rejecting the refund application.

5. We have carefully considered the facts and submissions made by both sides.

6. On the first issue as to whether refund application is maintainable without review of the assessment, appellant have relied on the case of Aman Medical Products Ltd (Supra). This judgment dealt with refund claim under Section 27 which is reproduced below for convenience.

27. Claim for refund of duty. - (1) Any person claiming refund of any duty-

(i) paid by him in pursuance of an order of assessment; or

(ii) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs  We find that in the case of Aman Medical Products(Supra), it was held that 5.?The Tribunal has referred to the cases of CCE, Kanpur v. Flock (India) Pvt. Ltd. [2000 (120) E.L.T. 285] and Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive), 2004 (172) E.L.T. 145 (S.C.). In both these cases, referred to by the Tribunal there was an assessment order which was passed and consequently it was held that where an adjudicating authority passed an order which is appealable and the party did not chose to exercise the statutory right of appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that adjudicating authority had committed an error in passing his order. These judgments will therefore not apply when there is no assessment order on dispute/contest, like as is in the facts of the present case.

We are not able to appreciate the Honble High Court judgment in the face of the Honble Supreme Court Judgment in case of Escorts Ltd.(supra) wherein the Apex Court held that The bill of entry presented by the appellant was signed, signifying approval by the assessing officer. That itself is an order of assessment in such a situation. We are, therefore, not prepared to agree that there is no order of assessment in this case, and therefore, the limitation prescribed in Section 27 did not begin to run. Section 27 is emphatic in language. It says that an application for refund of duty shall be made before the expiry of six months from the date on which the duty was paid. In the face of this provision, the authorities under the Act, including the Government of India, had no option but to dismiss the appellants application. This is also the view taken by this Court in Madras Rubber Factory v. Union of India [1983 (13) E.L.T. 1579 (S.C.) = 1976 (2) SCC 86] The Honble Supreme Court decision takes precedence over the High Court Judgments. In our view the decision of Apex Court in the case of Priya Industries Ltd. (supra) puts the issue beyond the doubt. The Supreme Court held that once the order of the assessment is passed and unless that order is reviewed under Section 28 or modified in appeal, that order stands and the officer considering the refund claim cannot stand in appeal over the assessment made by competent officers. We may respectfully observe that clause (ii) under Section 27 reproduced above does not apply in the present case because duty is paid by the appellant in pursuance of order of assessment, therefore appellants appeal on this point is rejected.

6.1. Coming to the second issue of time bar, we note the judgment of Apex court in Kirloskar Pneumatic Company(supra) in which it was held that The power conferred by Article 226/227 is designed to effectuate the law, to enforce the Rule of law and to ensure that the several authorities and organs of the State act in accordance with law. It cannot be invoked for directing the authorities to act contrary to law. In particular, the Customs authorities, who are the creatures of the Customs Act, cannot be directed to ignore or act contrary to Section 27, whether before or after amendment. May be the High Court or a Civil Court is not bound by the said provisions but the authorities under the Act are. Nor can there be any question of the High Court clothing the authorities with its power under Article 226 or the power of a civil court. No such delegation or conferment can ever be conceived.

The appellant seeks to take shelter behind the provisions of Section 154 of the Customs Act. Section 154 is reproduced below:-

SECTION 154.?Correction of clerical errors, etc.  Clerical or arithmetical mistakes in any decision or order passed by the Central Government, the Board or any officer of customs under this Act, or errors arising therein from any accidental slip or omission may, at any time, be corrected by the Central Government, the Board or such officer of customs or the successor in office of such officer, as the case may be.

It is sought to be argued that the error has arisen in the present case from the accidental slip or omission. We find that there has been no accidental slip or omission. In the present case CVD duty was paid equivalent to cess as was understood by the department as well as appellant. It was after prolonged litigation culminating in the judgment by the Honble Supreme Court which settled the legal position that no cess is payable in respect of imported rubber. Therefore Section 154 which allows correction on account of clerical or arithmetical mistake or accidental slips or omission does not cover the present case at all. The fact in the case laws provided by the appellant, namely, Union of India Vs. Aluminium Industries Ltd. [1996(83) ELT 41(Ker.)], and Commissioner of Cus. (Import) Vs. Indian Farmers Fertilisers Co-op Ltd. [2009(243) ELT 687(Bom.)].do not help cause of the appellant. In the case of Indian Farmers Fertilisers Co-op Ltd(supra) time limit for refund claim was held from the date of rectification of the assessment order. In the present case no such rectification order was ever sought by the appellant. Ld. Counsel has referred to the case of Keshari Steel (supra), we find the facts therein different. In that case there was error in calculation i.e. it was an arithmetical mistake. Therefore this judgment also is not applicable to the facts of the present case. In this circumstances we reject the contention of the appellant on this ground.

6.3 The last ground taken by the appellant is that claims are not hit by the unjust enrichment because they had produced a certificate from cost accountant stating that cess paid is shown as recoverable in their balance sheet. This ground has been taken only at the stage of the appeal before this Tribunal. In any case without deciding whether this ground should taken up at this stage or not, as we have already decided the matter against the appellant on the first two issues. We do not find it necessary to discuss the third issue. In view of the above the appeal is liable to be dismissed.

7. Appeal dismissed.

(Order pronounced in court on___________)

Ramesh Nair Member (Judicial) P.S. Pruthi Member (Technical)

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