Kerala High Court
Commissioner Of Customs vs M/S. Hadeed Steels Pvt.Ltd on 8 November, 2024
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
2024:KER:84081
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR.JUSTICE K. V. JAYAKUMAR
FRIDAY, THE 8TH DAY OF NOVEMBER 2024 / 17TH KARTHIKA, 1946
CUS.APPEAL NO. 27 OF 2018
AGAINST THE ORDER DATED 19.10.2017 IN C/22440/2014 OF
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL
BENCH, BANGALORE
APPELLANT/RESPONDENT:
COMMISSIONER OF CUSTOMS
CUSTOMS HOUSE, KOCHI-682009.
BY ADV SREELAL N. WARRIER, SC, CENTRAL BOARD OF
CUSTOMS DEPARTMENT
RESPONDENT/APPELLANT:
M/S. HADEED STEELS PVT.LTD
5/359, KADEEJA BUILDING, KANJIKODE(WEST),
PALAKKAD-678623.
THIS CUSTOMS APPEAL HAVING COME UP FOR ADMISSION ON
08.11.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
CUS Appeal No.27/2018
2
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JUDGMENT
Dr. A.K. Jayasankaran Nambiar, J.
This appeal preferred at the instance of the revenue
impugns the order dated 19.10.2017 of the Customs, Excise &
Service Tax Appellate Tribunal, South Zonal Bench, Bangalore in
Appeal No.C/22440/2014.
2. The brief facts necessary for disposal of this
appeal are as follows:
The respondent assessee had filed a Bill of Entry dated
26.10.2010 for clearance of 84 metric tons of light melting scrap.
The assessee also paid import duty of Rs.2,28,027/- without waiting
for the 'out of customs charge' endorsement on the Bill of Entry filed
by him. When the goods arrived at the port, an inspection by the
customs authorities revealed that the consignment contained in all
four containers was hazardous waste materials which were
prohibited for import under the Hazardous Waste (Management,
Handling and Trans boundary Movement) Rules, 2008. The customs
authorities therefore found that it was a case of misdeclaration of
the hazardous waste that was imported, as light melting scrap.
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3. On being intimated of the inspection report, the
assessee importer sought the permission of the Customs authorities
to re-export the entire cargo. The department accordingly permitted
him to re-export the cargo subject to payment of redemption fine of
Rs.1,50,000/- and a penalty of Rs.75,000/-. It is not in dispute that the
Redemption Fine and Penalty were paid by the assessee and the
imported consignment was re-exported.
4. The importer thereafter filed a refund application
claiming refund of Rs.2,28,027/- that he had remitted towards import
duty. It is not in dispute that the goods were not cleared for home
consumption and did not leave the customs area till they were
eventually re-exported. It is also not in dispute that the application
for refund filed by the importer was within the time permitted under
the Customs Act. The refund application of the importer was
however rejected by the original authority as also the First Appellate
Authority, and this led the importer to approach the Appellate
Tribunal through the appeal aforementioned.
5. The Appellate Tribunal on a consideration of the
issue found that the provisions of Section 26A of the Customs Act,
that deals with refund of import duty in certain cases, did not really
get attracted on the facts of the instant case since the goods were
never cleared for home consumption by the importer. The Tribunal
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also found that the importer had already paid the redemption fine
and penalty and hence, the duty amount paid, which became payable
only in the event of actual clearance of the imported goods for home
consumption, had to be returned to the importer. The Tribunal also
found that the doctrine of unjust enrichment would not be attracted
on the facts of the instant case since there was no possibility of the
importer having absorbed the import duty into the cost of any
product that he had sold within the domestic tariff area since the
goods had not been cleared for home consumption in the first place.
The Tribunal therefore allowed the appeal and directed the appellant
herein to refund the duty amount together with interest under S.27A
of the Customs Act.
6. In the appeal before us, the revenue raises the
following questions of law:
I. Has not the Tribunal erred in holding that claim of
refund of duty by Respondent come under Section 26A but
Section 27 of the Customs Act, 1962?
II. Has not the Tribunal erred in not considering the
correct position of Section 125 of Customs Act, 1962 which
imposes duty in addition to redemption of fine?
III Has not the Tribunal erred in holding that goods
ordered to be re-exported are not goods cleared for home
consumption, since the order of re-export involves two acts first
the goods are allowed to be cleared for home consumption and
thereafter it is allowed to be exported.
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7. We have heard Sri.Sreelal Warriar, learned Senior
Standing Counsel for the Customs and Central Excise Department.
There is no representation for the respondent assessee despite
notice.
8. On a consideration of the submission made across
the Bar, we find ourselves in agreement with the findings of the
Appellate Tribunal in the impugned order. As rightly noticed by the
Appellate Tribunal, this was a case where there was no clearance for
home consumption, of goods that had been imported. In fact, the
imported goods were re-exported immediately after their import and
without being cleared for home consumption. Under such
circumstances, the taxable event for the levy of import duty did not
materialize, and on a re-export of the said goods, there remained no
justification for the Customs Department to retain any amount paid
towards import duty. This is all the more so when it is the admitted
case that for the alleged offence with regard to import of hazardous
waste, the importer had already paid the necessary penalty and
redemption fine. The redemption fine paid was in lieu of confiscation
and only to enable the importer to reclaim the goods imported for the
purpose of re-export. Thus, the direction of the Appellate Tribunal to
refund the import duty paid by the importer, under circumstances
where the goods were never cleared for home consumption but were
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re-exported in their entirety, cannot be found fault with. This Appeal
therefore fails and we dismiss the same by answering the questions
of law raised therein against the appellant and in favour of the
respondent importer.
Sd/-
DR.A. K. JAYASANKARAN NAMBIAR
JUDGE
Sd/-
K. V. JAYAKUMAR
JUDGE
Sbna/11.11.24
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APPENDIX OF CUS.APPEAL 27/2018
PETITIONER ANNEXURES
Annexure A ORDER-IN-ORIGINAL NO. 234/2011 DATED
10.08.2011 ISSUED BY ADJUDICATION AUTHORITY.
Annexure B ORDER-IN-APPEAL NO. COC-CUMTM-000-APP-047-14-
15 DATED 16.04.2014.
Annexure C FINAL ORDER NO. 22535/2017 DATED 19.10.2017 IN
APPEAL NO. C/22440/2014 OF THE CUSTOMS,
EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
SOUTH ZONAL BENCH, BANGALORE.
