Dismissed

The Commissioner of Customs v. M/S.Shaji & Company

Kerala HC7 Nov 2022Cus.Appeal/22/2018

Case brief

AI extract

What is this about?

The High Court of Kerala, in Customs Appeal No.22/2018, dismissed the Revenue's appeal against the CESTAT's order allowing a refund claim for additional customs duty. The Court upheld the Tribunal's view that a departmental circular limiting applications to one per month could not override the statutory silence of the notification.

What did the court decide?

The appeal filed by the Revenue against the Commissioner of Customs (Appeals) and CESTAT orders allowing the refund claim is dismissed.

The Commissioner of Customs Vs M/S.Shaji & Company — Writ and Judicial Review | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE S.V.BHATTI

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THE HONOURABLE MR.JUSTICE BASANT BALAJI

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MONDAY, THE 7^TH DAY OF NOVEMBER 2022 / 16TH KARTHIKA, 1944

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CUS.APPEAL NO. 22 OF 2018

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AGAINST THE ORDER NO. 23131/2017 OF CUSTOMS, EXCISE & SERVICE TAX APP.TRIBUNAL, BANGALORE

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APPELLANT:

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THE COMMISSIONER OF CUSTOMS, CUSTOMS HOUSE, COCHIN-682009.

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BY ADVS.

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SRI.RAMAVARMA REGHUNATHAN THAMBURAN, SC, SMT.KAVERY S THAMPI

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RESPONDENT:

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M/S.SHAJI & COMPANY

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FIRST FLOOR, ROYAL PLAZA, BRIDGE ROAD, ALUVA, ERNAKULAM. 683101.

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BY ADVS. SRI.G.SUBRAMANIAN SRI.SAJI VARGHESE KAKKATTUMATTATHIL

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THIS CUSTOMS APPEAL HAVING COME UP FOR ADMISSION ON 07.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Customs Appeal No.22/2018

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JUDGMENT

S.V. Bhatti, J.

The Commissioner of Customs, Cochin/Revenue, is the appellant. M/s Shaji & Company/importer is the respondent. The appeal arises from the final order No.23131/2017 dated 08.12.2017 of Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (for short, ‘CESTAT’). The circumstances are in a narrow compass and are stated thus:

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Notification No.102/2007-Cus., Dated 14.09.2007, was issued by the Government of India under Section 25(1) of the Customs Act, 1962 (for short, the Act). The notification refers to the exemption and refund of additional customs duty paid on imported goods before the jurisdictional Customs officer. The notification is followed by circular No.6/2008-Cus., dated 28.04.2008. The circular stipulates a time limit and the number of refund applications the importer could make. On 27.11.2014, the importer filed for a refund of the additional customs duty for Rs.10,42,863/- as a 4% additional

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Customs Appeal No.22/2018

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duty made against the Bills of Entry dated 15.09.2014 and 27.09.2017. The jurisdictional officer, by order dated 16.03.2015 (Annexure A3), rejected the refund claim, held as follows:

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ORDER

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I reject the 4% additional duty refund claim of 1042863/- by M/s.Shaji & Company First Floor, Royal Plaza, Bridge Road Aluva, Ernakulam, Kerala made against the Bills of Entry Nos. 6763963/15-9-2014 and 6899401/27-9-2014 as per refund application $18/905/2014 R. Cus dated 27/11/2014 in terms of Notification No.102/2007-Cus dated 14.09.2007, as amended.

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The importer filed an appeal before the Commissioner of Customs (Appeals), and the Appellate Authority allowed the appeal as follows:

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I have carefully examined the facts and circumstances of the case the grounds of appeal submissions made at the time of personal hearing and all the evidence on record. I further find that the Adjudicating Authority rejected the refund claim on the premise that the appellant filed more than one claim in a month which is contrary to the terms of the Board's Circular No. 06/2008 Cus dated 28-04-2008. I find that administrative instruction or circulars are binding on the officers of the Department. The Revenue cannot challenge the circular, but it is open for challenge by the assessee. I am of the view that if a circular is beyond the provisions of the Notification, the circular cannot be binding, as there is no estoppels against a statute.. So the Departmental circular contrary to statutory provision has no legal existence. I

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Customs Appeal No.22/2018

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find that when the notification itself does not provide for any such condition, the Revenue cannot impose such a limitation which will have no statutory force. Therefore, I find that the impugned Order-in-Original stands on an infirm ground not backed by the calibre of law. The appellant's claim holds strength and the appeal deserves to be allowed on that count. In view of the above, I pass the following order;

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ORDER

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The appeal is maintainable.

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The Revenue filed appeal No.C/20181/2016-DB before the CESTAT. To complete the narration, we would like to refer to the brief conclusions recorded by the CESTAT as under:

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With the concurrence of both sides, the appeal itself is taken up for disposal. Upon perusal of the records of the case, we find that there is nothing on record to suggest that the refund claims are not payable on merit. The documents submitted in support of the claim have also been found to be in order. The only reason why the refund claims were rejected by the original authority was that more than on refund claim was filed in a month which is not in conformity with the CBEC circular No.6/2008, according to which the importers are required to file only one consolidated claim per month for refund in terms of Notification No. 102/2007. The learned Commissioner (Appeals) has taken the view that, since the notification itself does not provide for such a condition that only one refund claim is to be filed within a month, she has allowed. After perusal of records, we find no infirmity in the said order which is sustained and the appeal filed by the Revenue is dismissed. Cross-objections also stand disposed of.

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Customs Appeal No.22/2018

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Hence the appeal by raising the following substantial questions of

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law:

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“i. Whether the Tribunal was right in holding that notification itself does not provide for such a condition that only one refund claim is to be filed within a month?

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ii. Whether the Tribunal was right in holding against the decision of the Apex Court that Circulars issued by CBEC primarily intend to maintain uniformity throughout the country in levy of duty are binding on the Revenue and when a circular is in operation Revenue cannot be allowed to plea that it is not valid nor that it is contrary to the terms of statute?

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iii. Was not the Tribunal went wrong in neglecting the fact that the Commissioner of Customs (Appeals) has exceeded the authority not vested with that authority while holding that Circular went beyond the provisions of the statute?

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iv. Was not the Tribunal wrong in dismissing the appeal filed by the Department without pronouncing a speaking order?”

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Adv. Kavery S. Thampi, appearing for the Revenue,

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contends that the basis for refusing the refund claim of the importer

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is traceable to the circular issued by the Department. Per the actual procedure, the importer cannot maintain more than one occasion for a period. In other words, the claim should be made comprehensively for all the refunds to which the importer is

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Customs Appeal No.22/2018

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entitled. The findings recorded by referring to a Circular, the Commissioner of Customs (Appeals) fell in grave error by looking at the primary notification and allowing the appeal filed by the importer. The notification and the Circular bind the CESTAT. The CESTAT should have examined the case objectively and held that the claim for refund is contrary to the procedure prescribed on this behalf and should have rejected the claim for refund.

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Adv. G. Subramanyam appearing for the importer, contends that the claim for refund of additional customs duty is traceable to notification No.102/2007-Cus., dated 14.09.2007. The notification is silent on the period within which the refund has to be made or the number of applications that could be filed for a refund. In the case on hand, the Bill of Entry is not split into two separate refund claims, but refund claims are filed after the time stipulated in Circular No.6/2008 dated 28.04.2008. The Circular may be binding on the jurisdictional officer and would have been issued to facilitate smooth and timely disposal of the refund applications. It is argued that the Commissioner of Customs

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Customs Appeal No.22/2018

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(Appeals) upheld the sanctity of Notification No.102/2007 and verified whether the Circular could go beyond the Notification. The findings recorded by the CESTAT are to be appreciated from more than one perspective, viz., the claim for refund is tenable, and the ground now stated by the Revenue is contrary to the very Circular by which the refund of additional customs duty is made.

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We have taken note of the submissions made by the counsel appearing for the parties. The counsel for the appellant has reiterated the reasons weighing with the Department for filing an appeal under Section 130 of the Act. We are, in the exercise of power, jurisdiction under Section 130, required to see the findings recorded by the CESTAT and a substantial ground on the said findings raised and successfully established. The concurrent views expressed by the Commissioner of Customs (Appeals) and the CESTAT do not, first of all, invite the questions of law, much less substantial questions of law. The relief has been rightly granted by the Commissioner of Customs and confirmed by the CESTAT. The questions are answered against the Revenue and in favour of the Importer. When

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Customs Appeal No.22/2018

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we agree with the view expressed by the Commissioner of Customs

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and the CESTAT and prefaced the conclusions weighing with us in this judgment, we would not take the further trouble of reiterating the very same decision differently.

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The appeal fails, dismissed. No order as to costs.

Sd/-

S.V.BHATTI

JUDGE

Sd/-

BASANT BALAJI

JUDGE

Customs Appeal No.22/2018

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APPENDIX OF CUS.APPEAL 22/2018

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APPELLANT ANNEXURES

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Annexure A1 COPY OF NOTIFICATION NO.102/2007 DATED 14.9.2007. Annexure A2 COPY OF CIRCULAR NO.06/2008 DATED 28.4.2008. Annexure A3 COPY OF THE ORDER-IN-ORIGINAL NO.221/2015 DATED 16.03.2015. Annexure A4 COPY OF THE ORDER-IN-APPEAL NO.285/2015-16 DATED 20.11.2015. Annexure A5 COPY OF ORDER ISSUED BY THE COMMITTEE OF COMMISSIONERS. Annexure A6 FINAL ORDER NO.23131/2017 DATED 8.12.2017 ISSUED BY CESTAT, BANGALORE.

The Commissioner of Customs v. M/S.Shaji & Company

Case brief

What is this about?

What did the court decide?

The Commissioner of Customs v. M/S.Shaji & Company

Case brief

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