By TIOL News Service

MUMBAI, AUG 01, 2016: THIS is a Revenue appeal.

The importer had been classifying parts of electronic hardware under appropriate headings. Vide SCNs, the CCE & Cus, Goa sought to levy duty on the parts as ‘finished products imported in CKD form' for the period from 2001 to 2005. During the pendency of these proceedings, further imports were levied to duty as finished products at higher rate which the importer paid ‘under protest'.

For the B/E filed between September 2006 and February 2008, importer claimed refund vide application dated 9th April 2012, which was returned as ‘premature' by letter dated 17th June 2013 and was resubmitted later in August.

The refund claim was rejected on the ground that the importer had not challenged the assessment &by relying upon the apex court decision in Priya Blue Industries - 2004-TIOL-78-SC-CUS.

The Commissioner (A) allowed the appeal of the importer and, therefore, Revenue is in appeal.

Incidentally, the proceedings for duty demand initiated under the SCNs were dropped by the Commissioner and the Revenue appeals too met with rejection at the hands of the CESTAT and which order apparently have been accepted by the Revenue.

Noting that the facts involved in the case is a "tangled web" and the importer had no option but to pay the enhanced duty Under Protest, the Bench further observed -

“8. It is clear from the records that it was Revenue which initiated the challenge to assessment by issuing demand for differential duty on imports for the period from 2001 to 2005. Bills of entry for the subsequent period, during the pendency of the notice before the Commissioner of Customs, was assessed to higher duty by the Asst./Dy. Commissioner of Customs. Even if the assessments were deemed to the appealable notwithstanding the absence of a speaking order, such appeals would lie before Commissioner (Appeals). It would not be incorrect to describe as preposterous any expectation on the part of the importer to entertain hopes of settlement of the dispute by the Commissioner (Appeals) when the issue was pending before Commissioner of Customs. Also, it would be nothing short of ridiculous to expect an assessing authority to render a finding when the issue was yet to be decided upon by his superior authority…. 

9. There can be no doubt that the assessment was under challenge whether by Revenue or by the importer is not relevant. Lack of challenge to assessments of subsequent imports by separate appeals does not alter the factual matrix of the subjecting of this dispute in assessment to the appellate process. In view of the dropping of proceedings for the period between 2001 and 2005, the outcome of an appeal before Commissioner (Appeals), too, cannot be in doubt. The contents of a speaking order to be issued by the assessing officer, given the dropping of demand by Commissioner of Customs, does not leave much to imagination."

The CESTAT also observed that dispute on taxability stands settled in favour of the importer for the period from 2001 to 2005 and this resolution is equally applicable to subsequent imports.

Consequently, the levy of enhanced duty is contrary to law and cannot be retained by the exchequer except on ground of limitation of time in seeking refund, the Bench added.

Holding that the impugned order setting aside the rejection of the refund claims is correct, the appeal of Revenue was dismissed and the original authority was directed to dispose of the refund claim after ascertaining that the bar of unjust enrichment does not operate.

(See 2016-TIOL-1910-CESTAT-MUM)