Gujarat High Court

The Principal Commissioner, Customs, ... vs M/S. Gail (India) Ltd on 13 June, 2024

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

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     C/TAXAP/211/2024                              ORDER DATED: 13/06/2024

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            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                        R/TAX APPEAL NO. 211 of 2024

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       THE PRINCIPAL COMMISSIONER, CUSTOMS, AHMEDABAD
                       COMMISSIONERATE
                             Versus
                      M/S. GAIL (INDIA) LTD.
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Appearance:
MR CB GUPTA(1685) for the Appellant(s) No. 1
for the Opponent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
       and
       HONOURABLE MR. JUSTICE NIRAL R. MEHTA

                        Date : 13/06/2024
                          ORAL ORDER

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. This appeal is filed under section 130 of

the Customs Act, 1962 [for short 'the

Act'] by the appellant-Revenue proposing

the following substantial question of law

arising out of the order dated 25.08.2013

passed by the Customs, Excise and Service

Tax Appellate Tribunal, West Zonal Bench,

Ahmedabad [for short 'CESTAT']in Customs

Appeal No. 12326 of 2018:

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(i) Whether the CESTAT is right in holding that "date of service" of finalization of provisional assessment is the relevant date for computation of period of limitation for filing refund claim when section 27(1B)(c) of the Customs Act,1962 provide the date of adjustment of duty after the final assessment or date of re-assessment, as the relevant date for computation of period of limitation?

(ii) Whether in the facts and circumstances of the case, the CESTAT is right in allowing the appeal of the respondent?

2. The CESTAT has allowed the appeal filed by

the respondent which was preferred against

the order of rejection of refund claim

made by the respondent-assessee as time

barred in view of the following facts.

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2.1 The respondent-assessee is engaged

in import of Liquified Natural Gas [LNG].

The respondent filed 16 Bills of Entry for

clearance of imported LNG which was

assessed provisionally under section 18 of

the Act on execution of the bond. On

production of the original document, the

said Bills of Entry were assessed finally

as under:

Sr B/E/ No. TR6 Challan Date of Final Qty.as per Qty as per Custom Custom Refund no & No. & Date Assessment Bill of final invoice/ Duty paid at Duty to be claimed Date (As per E- Lading/Pro finally the time of paid as per of excess Receipt) visionally Assessed Pro final invoice duty paid assessed bill of Entry Assessment qty/Finally Bill of Entry (MMBtu) Assessed (MMBTU) B/E. 1 2 3 4 5 6 7 8 9 (8-7) 1 3423536/ 2007179039/ 07.10.2015 3315760 3243490.09 157901801 154460215 3441586 01.10.2013 01.10.2013 2 3724229/ 2007405289/ 20.10.2015 3321470 3251856.24 128201536 125514618 2686918 06.11.2013 06.11.2013

3 4161112/ 2007733287/ 08.10.2015 3209670 3174303.82 179554727 177576797 1977930 23.12.2013 26.12.2013 4 6181535/ 2009267277/ 07.10.2015 3150934 3002707.14 141638631 134975693 6662938 21.07.2014 22.07.2014 5 4576314/ 2008051383/ 08.10.2015 2441880 2399797.88 117775559 115745892 2029667 07.02.2014 10.02.2014 6 4083700/ 2007673514/ 08.10.2015 3465900 3400095.14 163754376 160645294 3109082 16.12.2013 16.12.2013 7 3561494/ 2007283015/ 08.10.2015 3333260 3312644.41 153866072 152914700 951372 17.10.2013 18.10.2013 8 6005546/ 2009135927/ 08.10.208 3160082 2790832.64 141278990 137136063 4142927 03.07.2014 04.07.2014 9 9727328/ 2005886550/ 08.10.2015 3651640 3568274.61 156245997 152678990 3567007 01.04.2013 02.04.2013

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10 5603392/ 2008831620/ 08.10.2015 3171073 3017711.82 140949534 134754331 6195203 26.05.2014 07.05.2014 11 3615729/ 2007324503/ 08.10.2015 3154352 2996419.15 142592621 135453311 7139310 23.10.2013 24.10.2013 12 9651747/ 2005824134/ 08.10.2015 3413153.2 3242553.73 121847591 115757324 6090267 22.03.2013 26.03.2013 13 3249824/ 2007046497/ 20.10.2015 3072092 2936808.15 126548968 120976253 5572715 12.09.2013 13.09.2013 14 3325533/ 2007121440/ 07.10.2015 3171666 3019477.81 148273795 140948752 7325043 20.09.2013 24.09.2013 15 5296506/ 2008610173/ 07.10.2015 3525072 3368150.68 176731721 168864423 7867298 24.04.2014 26.04.2014 16 5030872/ 2008409667/ 08.10.2015 3448646.1 3269405.04 175845176 166705793 9139383 27.03.2014 29.03.2014 Total Amount of Refund (In Rs.) 77898646

2.2 The respondent-assesseee filed

refund application for the excess duty

paid on 26.10.2016 after submitting

certificates dated 07.09.2016 issued by M/

s. Joshi, Patel, Bhatt & Co., Chartered

Accountant stating that as required for

examination of the principle of unjust

enrichment before sanction of the refund

under sections 27 and 28D of the Act

wherein it was certified that the amount

of custom duty paid against the Bills of

Entry was shown as refund of custom duty

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under the head "Receivables" in the books

of account and therefore, incidence of

excess custom duty paid has not been

passed on to the customers.

2.3 The Adjudicating Authority

rejected, the refund claim of the

petitioner as time barred because the date

of final assessment was between 07.10.2015

and 20.10.2015 for aforesaid 16 Bills

which was beyond the prescribed period of

one year as per section 27(1B)(c) of the

Act which provides that where any duty is

paid provisionally under section 18, the

limitation of one year shall be computed

from the date of adjustment of duty after

final assessment thereof or in case of

reassessment from the date of such

reassessment. The adjudicating authority

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therefore after issuance of show-cause

notice and considering the reply filed by

the respondent-assessee, rejected the

refund claim on the ground that the

respondent-assessee filed the refund claim

after one year from the date of final

assessment between 07.10.2015 to

20.10.2015.

3. Being aggrieved, the respondent-assessee

preferred appeal before the CESTAT which

was allowed by relying upon the decision

of Indian Oil Corporation reported in 2014

(308) ELT 169 by observing as under:

"5.We have considered the rival submission. we find that the Tribunal as has held that the order of finalization of the provisional assessment is the relevant date for the purpose of claiming refund. In the case of Indian Oil Corporation (supra) following has been observed.

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"2. The second issue is whether the refund arising out of completion of provisional assessment shall undergo the process of Section 27 when the refunds related to the period prior to 13-7-2006.

3.To answer both the issues, facts are not in dispute exhibiting that the provisional assessments in the case of the appellant were completed prior to the communication of the final assessment order. The date on which a public order is served on the person to whom that is meant, such date of service is counted for remedial measure if the person on whom the order served is aggrieved. The date of communication is deceive for different purposes of law in respect of the person to whom the order is meant and on whom that Is served.

4.Secondly when refund arises upon completion of provisional assessments, that flows suo motu under law prior to 13-7-2006 to the assessee without an application being made. The

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refund so arising does not under go the process of Section 27 of the Customs Act, 1962 but is covered by the Section 18 of the said Act. However Section 18 has undergone amendment with effect from 13-7-2006 with necessary Implication that even refund arising on completion of provisional assessment shall be governed by Section 27 of the said Act. By that amendment, bar of limitation as well as unjust enrichment are enacted to the law, Therefore before 31-7-2006, the refund arising upon completion of the provisional assessments is not intended by law to undergo the test of limitation as well as unjust enrichment in terms of law laid down by the Hon'ble High Court of Delhi in the case of the present appellant reported in 2012 (282) E.L.T. 368 (Del.). Following the ratio laid down therein, appeal of the appellant is allowed and the refund is payable to the appellant".

In view the above, we find that the case of the appellant is covered by the aforesaid decisions an date of service of finalization of

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provisional --_assessment is the relevant date for this purpose.

6. Learned AR has argued that the information regarding finalization was known to the appellant and they could have assessed the dome through the ICEGATE, however, it is also notice that revenue has been regularly serving the order of finalization of provisional assessment as can be seen from the letters dated 02.03.2018, 07.04.2018, 07.06.2018, 04.04.2018, 10.03.2017, 10.03.2017, 23.03.2017, 26.04.2017, 15.11.2017, 21.11.2017 and 21.11.2017 produced by the appellant."

4. Learned advocate Mr. C.B.Gupta for the

appellant submitted that as per contents

of the show-cause notice and the findings

recorded at by the adjudicating authority,

as per the report of the Superintendent of

Customs dated 29.11.2016, the Bills of

Entry were finally assessed between

07.10.2015 and 20.10.2015 and refund

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application is filed on 26.10.2016 and

therefore, the same is time barred as

refund application is filed beyond one

year from the date of final assessment.

4.1 It was submitted that the

department has uploaded the final

assessment on the portal of ICEGAT System

and the respondent was required to take

notice of such final assessment made

available on the portal. It was therefore

submitted that the Tribunal has committed

an error in allowing the appeal filed by

the respondent.

5. Considering the above submissions, it

would be germane to the refer to the

relevant provision of section 18 and 27 of

the Customs Act reads as under:

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"(18). Provisional assessment of duty[(1) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46 [and section 50],

(a) where the importer or exporter is unable to make self-assessment under sub-section (1) of section 17 and makes a request in writing to the proper officer for assessment; or

(b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or

(c) where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or

(d) where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry, the proper officer may direct that the duty leviable on such goods be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty as may be finally assessed or re-assessed as the case

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may be, and the duty provisionally assessed.]

(27). Claim for refund of duty.--3 [(1) Any person claiming refund of any duty or interest, --

(a) paid by him; or

(b) borne by him,

may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest:

(1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely:--

(a) in the case of goods which are exempt from payment of duty by a special order issued under sub-

section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order;

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(b) where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction;

(c) where any duty is paid provisionally under section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such re-assessment."

6. On perusal of the above provisions of the

Act, it is clear that once the provisional

assessment is done and the assessee is

entitled to the refund claim, then he has

to make application within a period of one

year under section 27 read with section

27(1B) of the Act.

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7. It is pertinent to note that the

adjudicating authority while considering

the reply filed by the petitioner has

observed in para 14.4 of the order dated

20.03.2017 while rejecting the refund

application of the petitioner as under:

"14.4 I have also gone through the defence submission dated 08.02.2017, additional submission dated 07.03.2017 and oral submission made by them during the course of personal hearing on 27.02.2017, I find that the claimant has also pleaded that their letter dated 19.08.2016 may be treated as their refund claim which has been filed within period of one year from the date of final assessment between 07.10.2015 to 20.10.2015, I have seen the said letter dated 19.08.2016 (marked as Annexure 8-B of their defence reply dated 07.02.2017), I find that the said letter is purely In a prayer / request form for early finalizing of Customs duty by way of early final assessment and, no way related to refund of Customs duty. Also, there is no evidence from the enclosed photocopy of the aforesaid letter that it has been acknowledged / received by the department at any point of time. The said letter has not

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been received by this office. Also, therefore, it carries no meaning at all."

8. From the above observation it appears that

the assessee made application on

19.08.2016 with a prayer for finalizing of

custom duty by way of final assessment

which means that till that point of time,

the assessee was not aware about the final

assessment.

9. Merely because the Custom Department has

uploaded the final assessment orders on

portal is not sufficient compliance of

intimation to the assesee as it is a

condition sine quanon to file the refund