Fact: M/s. Micromax Informatics Limited (“the petitioner”) had imported mobile handsets under various bill of entries filed during the period between July, 2014 to June, 2015. On such imports, the petitioner had made payment of additional duty of customs commonly referred to CVD at the rate of 7.21% till February 28, 2015 and for the period post March 01, 2015, but the petitioner had paid such duty at the rate of 13.5% as prescribed.
Initially, the petitioner had paid higher rate of duty on the basis of the Revenue’s stand that since on imported goods, no excise duty was levied, the question of not availing CENVAT Credit does not arise, in other words the benefit of exemption notification dated March 17, 2012 was not allowed to importers.
Petitioner’s Contention of law: The petitioner contended that in the case of M/s. SRF Limited vs. CC, Chennai, where SC held that an import of goods would also be entitled to claim the benefit of exemption from payment of CVD in terms of said notification. Thus, the petitioner stated that duty paid at the higher rate on its import was refundable as after judgment of SC it was entitled to clear the imported goods by paying reduced CVD in terms of Notification dated March 17, 2012. The petitioner also stated that having made the process of filing BOE automatic and online, the importer could not file the BOE without declaring the full rate of CVD unless and until the Revenue had changed its electronic system to accept BOE disclosing CVD at concessional rate.
Accordingly, the petitioner wrote letters requesting Revenue to make necessary changes in its electronic system. However, the Revenue did not make necessary changes, in the meanwhile, the petitioner’s import consignment had arrived, whether the assessee was under urgency to get cleared. Under compulsion, the assessee filed BOE without availing benefit of exemption notification and also paid full CVD only upon which the goods were cleared.
Held: The Hon’ble High Court of Bombay vide its Writ Petition No.5751 of 2016 dated November 30, 2018 stated that even in Section 27 of the Act, the procedure for claiming refund has been suitably modified. HC remarked that amended Section 27 merely referred to the claim of refund of duty or interest paid or borne by the refund claimant while the earlier reference to the refund of duty or interest paid pursuant to an order of assessment is now deleted.
HC stated that this would be in consonance with the changed procedure for clearance of imported goods as contained in section 17 of the Act. HC further stated that the opportunity to have the bill of entry amended in terms of Section 149 of the Act, was simply not available to the assessee.
HC stated that Revenue was duty bound to consider such applications subject to ofcourse to fulfilment of other legal and statutory requirements. Thus, HC held that there was absolutely no reason as to why the Revenue should not refund such duty while stating that any other view would amount to allowing the Union of India to collect tax without authority of law. However, HC noticed that there was no clarity in the order itself, whether the Revenue accepted the petitioner’s evidence about the ‘unjust enrichment’.
HC accordingly revived the refund applications while directing the Competent Authority to process the same and pass fresh order. However, HC stated that while passing such order only scrutiny available to the Authority would be whether the assessee had established that the excess duty collected has not been passed on to any other person.
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