Telangana High Court
M/S Sony India Pvt. Ltd vs Union Of India And Another on 12 August, 2021
Bench: M.S.Ramachandra Rao, T.Vinod Kumar
HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T.VINOD KUMAR
Writ Petition No.4793 of 2021
ORDER: (Per Hon'ble Sri Justice M.S. Ramachandra Rao)
This Writ Petition is filed under Article 226 of the Constitution
of India challenging the order dt.07.02.2020 in C.No.S/26/MISC/122-
2020-ACC of the Office of the Assistant / Deputy Commissioner of
Customs, Air Cargo Complex, Shamshabad, Hyderabad
(2nd respondent herein).
2. The Petitioner herein is a private limited company having its
registered office at New Delhi. It is carrying on the business of
manufacture of and marketing of different types of electronic goods
and consumer electronics including mobile phones.
3. During the period 04.08.2014 to 29.01.2015 it imported mobile
phones in India for trading purposes.
4. On import of the said mobile phones under the Bills of Entry
(BoEs), it classified them under the Customs Tariff Item No.8517 12
90 of Schedule I to the Customs Tariff Act, 1975 and paid
Countervailing Duty (C.V.D.) under Section 3(1) of the Customs Act
at the rate of 6% as per Sl.No.263A(i) of Notification No.12/2012-CE
dt.17.03.2012 (Exemption Notification).
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5. But, under Sl.No.263A(i) of the Exemption Notification, the
mobile phones were chargeable to concessional rate of 1% subject to
the condition No.16 of the Exemption Notification, and that this
condition specified that no credit should have been availed on the
inputs or capital goods used in the manufacture of mobile phones.
6. At the time of import of mobile phones in the BoE, petitioner
had not claimed any exemption under Sl.No.263A(ii) of the
Exemption Notification which allowed a payment of C.V.D. at 1%.
7. Petitioner contends that this reduced rate was not availed of by
it as the 2nd respondent had taken a stand that such exemption is
available only when the assessee has not taken credit in respect of the
inputs and capitals goods under the CENVAT Credit Rules, 2004 for
the manufacture of mobile phones; since the inputs and capital goods
in the present case were procured and utilized outside India, the
2nd respondent was of the view that the reduced rate would not be
available to importers like the petitioner; and during the above period,
the EDI system did not permit availment of the lower rate of tax as per
the Exemption Notification.
8. In 2015, the Supreme Court in M/s. SRF Limited vs.
Commissioner of Customs1 held that where lower rate of Excise
Duty has been provided with condition of non-availment of CENVAT
Credit, CVD shall also be applicable at lower rate as an importer-
2015 (318) ELT 603
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trader cannot avail CENVAT Credit in any case, and that the
condition attached to the lower rate is deemed to be fulfilled.
9. Therefore, by virtue of the above decision, the petitioner
contends that importers and itself were also eligible to avail of the
benefit of the reduced rate of 1% under the Exemption Notification;
and after the above decision by the Supreme Court, it sought to claim
benefit of the Exemption Notification (SL.No.263A) for import of
Mobile handsets including cellular phones.
10. But the EDI System used for filing the Bills of Entry was not
updated to make available the benefit of the said Notification to
imported goods; the benefit of the Notification was not extended to
petitioner, despite it seeking the same; and due to deficiency in the
system, the benefit of exemption otherwise eligible was deprived to it
and it was forced to pay CVD at merit rate.
11. To show that the EDI system was not updated during the
relevant period, it relied on letter dt.17.05.2016 issued under the Right
to Information Act by the DG Systems and Data Management, New
Delhi.
12. The petitioner contends that the Supreme Court in ITC Ltd. vs.
Commissioner of Central Excise2 held that refund under Sec.27
would only be permissible when the BoE has been amended or
modified under the provisions of the Customs Act; and so petitioner
(2019) 17 SCC 46
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submitted letter dt.22.11.2019 before the 2nd respondent requesting to
amend 136 BoEs under Section 149 of the Customs Act to reassess
the BoEs and grant subsequent refund, by making the following
submissions, viz.,
(a) that Section 149 provides for amendment of a BoE to be
permitted on the basis of documentary evidence which was in
existence at the time when the goods were cleared, deposited or
exported;
(b) that the Supreme Court in ITC Ltd. (2 supra), held that
the self-assessed BoE must be either amended or modified
under the relevant provisions of the Customs Act; that the
observations of the Supreme Court show that apart from
Section 128 of the Customs Act, there are other relevant
provisions of the said Act under which a BoE can be modified
before refund can be claimed under Section 27 of the Customs
Act;
(c) that Section 149 does not prescribe any time limit or any
other restriction and that this has been recognized in the various
cases by the CESTAT; and
(d) that Section 17(5) provided that where reassessment done
under sub-section 17(4) is contrary to the assessment done by
the importer or exporter regarding the matters specified therein,
the proper officer has to pass a speaking order on the
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reassessment within 15 days from the date of reassessment of
the Bill of Entry or the shipping bill, as the case may be, and
relied on the decision in Usha International Ltd. vs. Assistant
Commissioner of Customs, Chennai3.
The impugned order dt.7.2.2020
13. The 2nd respondent then issued the impugned order
dt.07.02.2020 in C.No.S/26/MISC/122-2020-ACC rejecting
petitioner's request / application vide letter dt.22.11.2019 for
amendment in the Bills of Entry under Section 149 r/w Section 17 of
the Customs Act stating as under :
"(a) that the judgment of the Hon'ble Supreme Court in SRF
Limited (supra) was delivered on 26.03.2015 and the same was
not available at the time of the clearance of the goods
pertaining to the Bills of Entry in the present case;
(b) an application filed on similar ground by petitioner for
re-assessment, pertaining to a different period has not been
considered by the 2nd respondent and the appeal against the
order of rejection was dismissed by the Ld. Commissioner
(Appeals).
(c) as the assessment of the Bills of Entry is an appealable
order and in the absence of the same being challenged by the
importer, the same attains finality. Thus, it is assumed that the
importer has accepted the assessment of the Bills of Entry."
2019 (365) E.L.T. 56 (Mad.)
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Contentions of Petitioner
14. The petitioner contends that the impugned order has been
passed in complete contradiction with the decision of the Supreme
Court in ITC Ltd. (2 supra) wherein it has been held that a BoE is
required to be amended or modified, under the relevant provisions of
the Customs Act, before filing of a refund application under Section
27 of the Customs Act; that under the Customs Act, a BoE can be
either modified by way of filing an appeal under Section 128 of the
Customs Act or can be amended under Section 149 and / or 154 of the
Customs Act; that under the Customs Act, there is no other manner in
which a BoE can be modified or amended part from these two
methods; thus, from the above observations of the Supreme Court, it
is very clear that a refund of any excess duty paid while filing the
BoE, can be claimed under Section 27 of the Customs Act when such
a BoE is amended; that the 2nd respondent has not even considered the
decision of the Supreme Court in ITC Ltd. (2 supra); that the
Supreme Court clearly stated in the above case that a BoE has to be
amended before filing a claim of refund under Section 27; and that the
ratio of decision is very clearly applicable, and it is squarely covered
in the present case.
15. The petitioner further contended that it sought amendment of
BoEs to claim the benefit of Exemption Notification which could not
be claimed due to non-availability of the Exemption Notification in
Respondents' EDI systems; that if the BoEs are amended, it would be
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eligible for refund of the excess duty paid and which can be claimed
under Section 27 of the Customs Act; and that the impugned order is
completely illegal as the 2nd respondent was bound to follow the
decision of the Supreme Court which he failed to do and failed to
exercise the jurisdiction.
16. The petitioner also contended that the 2nd respondent had
referred to in Order-in-Appeal No.HYD-CUS-000-APP-022-19-20
dt.28.06.2019 passed by the Commissioner of Customs and Central
Excise (Appeal-I), Hyderabad for upholding the rejection of the
amendment application filed by petitioner for a different period; that
this order was passed prior to the decision in ITC Ltd. (2 supra) on
18.9.2019 which laid down the law very clearly; and so could not
have been relied on by the 2nd respondent.
17. It is further contended by the petitioner that the impugned order
has erroneously rejected the amendment of the BoEs under Section
149 of the Customs Act; that Section 149 provided for amendment of
a BoE on the basis of documentary evidence which was in existence at
the time when the goods were cleared, deposited or exported; that the
only restriction is Section 30 and 41 of the Act which relates to export
and import manifest which are not allowed to be amended or where
there is a fraudulent intention; that in the present case, the petitioner
applied for amendment of the BoEs on the strength of documents
which were in existence at the time of clearance of the goods, i.e., the
Exemption Notification; that in the impugned order, the 2nd respondent
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has erroneously held that the amendment has been sought on the basis
of the decision of the Supreme Court in SRF Ltd. (1 supra) and that
the decision in SRF Ltd. (1 supra) was pronounced on 26.03.2015
which was after the relevant period of the clearance of the goods
pertaining to the 136 BoEs, and hence the benefit of the same will not
be available to petitioner.
18. Petitioner asserts that the Supreme Court in SRF Ltd. (1 supra)
clarified that an importer would also enjoy the same benefit as a
manufacture if it is importing a like product for which a beneficial rate
of duty is available for a manufacturer; that the said decision in SRF
Ltd. (1 supra) did not introduce a new benefit under the provisions of
the Customs Act but merely provided clarifications regarding a
benefit that was already provided under the provisions.
19. Petitioner also contended that the 2nd respondent erred in
holding that the BoEs should have been challenged only by way of
filing an appeal before the Appellate authority and on not being
challenged, the assessment became final.
20. Petitioner pointed out that a BoE can be amended either by
filing an appeal u/s.128 or being amended under Sec.149 of the Act;
and he could not have insisted that only an appeal is a proper remedy
to amend the BoEs ignoring Sec.149 of the Act.
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The contentions of 2nd respondent:
21. Counter-affidavit was filed by 2nd respondent contending that at
the time of import, the petitioner herein had not claimed the benefit of
concessional rate of duty under the Entry 263(ii) of the Notification;
that later, the Supreme Court in SRF Ltd. (1 supra) held that the
lower rate of Excise Duty has been provided with the condition of
non-availment of CENVAT Credit; that CVD shall also be applicable
at lower rate as an importer-trader cannot avail CENVAT credit in
any case.
22. The respondents contend that in order to seek refund of excess
CVD paid on the import of Mobile Phones during the period May
2014 to January, 2014 (a period different from the subject period in
this Writ Petition); that the petitioner herein filed refund applications
under Section 27 of the Customs Act, 1962, and the same was rejected
by the original authority; and aggrieved by the orders, the petitioner
herein filed Appeal before the 2nd respondent wherein the appellate
authority held that appellant should have applied for re-assessment
under the provisions of Section 128 of the Customs At, 1962 instead
of seeking amendment under the provisions of Section 149 of the
Customs Act, 1962 as reassessment was the only remedy available to
petitioner; and aggrieved by the orders of the Appellate
Commissioner, the petitioner filed Appeal before the CESTAT, which
is pending.
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23. It is contended that meanwhile the Supreme Court in ITC Ltd.
(2 supra) held that refund under Section 27 would only be
permissible when the Bill of Entry had been amended or modified
under the provisions of the Customs Act, 1962; that in ITC Ltd.
(2 supra), it was held that the refund under the provisions of Section
27 of the Customs Act, 1962 would only be available when Bill of
Entry has been amended or modified under the provisions of Custom
Act, 1962; that in the instant case, the petitioners filed self-assessed
Bills of Entry and not disputed the assessment, and the assessment had
attained finality; that it is not the case of any error or lapse apparent
on account of 2nd respondent's - Department; that petitioner was
required to seek re-assessment as provided under the provisions of
Section 128 of the Customs At, 1962 within such stipulated time and
as per the conditions provided therein.
24. According to the 2nd respondent, the petitioner's request for
amending the BoE is against the provisions of the Customs Act and
was not sustainable.
25. The 2nd respondent further stated that the provisions of Section
149 have not provided that the amendment of documents
unconditional. The proper officer is vested with the power to allow
the amendment by exercising his discretion; and in the instant case,
for bypassing the provisions of Section 128 of the Act to re-assess, no
valid grounds have been displayed or presented by petitioner, and
therefore, the proper officer has rejected the request of petitioner.
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26. It further stated that same action cannot be sought under two
different sections of the Customs Act, 1962; that there is a specific
provision for re-assessment as provided under Section 128 of the
Customs Act, 1962; that if re-assessment has to be carried out under
Section 149 without any limitation of time, the existence of the
provisions of Section 128 and Appeal mechanism therein would
become redundant; and if at all the amendments, even in the nature of
re-assessment, are to be carried out under the provisions of Section
149, there is no requirement for the existence of the provisions of
Section 128 or other similar provisions.
The consideration by the Court
27. Heard Sri Kamal Sawhney, learned counsel for Sri Avinash
Desai, learned counsel for petitioner and Sri B.Narasimha Sarma,
learned Special Senior Counsel for the respondents.
28. We have noted the submissions of both sides.
29. The provisions of Section 128 of the Customs Act, 1962 states
as under :
"(1) Any person aggrieved by any decision or order passed under
this Act by an officer of customs lower in rank than a
[Commissioner of Customs] may appeal to the [Commissioner
(Appeals)] [within sixty days] from the date of the communication
to him of such decision or order : [Provided that the
Commissioner (Appeals) may, if he is satisfied that the appellant
was prevented by sufficient cause from presenting the appeal
within the aforesaid period of sixty days, allow it to be presented
within a further period of thirty days.]
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30. So it provides a remedy of appeal against any order passed by
the Dy. Commissioner of Customs, who is lower in rank than a
Commissioner of Customs, to the Commissioner (Appeals).
31. Therefore, the petitioner has a remedy of an appeal against the
assessment of the BoEs in question.
32. But there is another provision in the Customs Act, 1962 which
also enables an assessee to seek amendment of a BoE. It is Section
149 of Customs Act, 1962, which reads as under :
"149. Amendment of documents : Save as otherwise provided in
sections 30 and 41 the proper officer may in his discretion
authorize any document after it has been presented in the customs
house to be amended.
Provided that no amendment of a bill of entry or shipping bill or
bill of export shall be so authorized to be amended after the
imported goods have been cleared for home consumption or
deposited in a warehouse or the export goods have been exported
except on the basis of documentary evidence which was in
existence at the time the goods were cleared, deposited or
exported, as the case may be."(emphasis supplied)
33. So Sec.149 is an additional remedy available to the petitioner to
seek amendment of the BoEs subject to the condition that such
amendment is sought on the basis of documentary evidence which
was in existence at the time the goods were cleared, deposited or
exported as the case may be.
34. In the decision of the Supreme Court in ITC Ltd. (2 supra)
while holding that the refund cannot be granted by way of a refund
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application under Section 27 of the Act until and unless an assessment
order is modified and a fresh order of assessment is passed and duty
re-determined, the Supreme Court nowhere said that such amendment
or modification of an assessment order can only be done in an Appeal
under Section 128. In para 47, the Court held categorically:
"47..... we are of the opinion that the claim for refund cannot
be entertained unless the order of assessment or self-assessment is
modified in accordance with law by taking recourse to the
appropriate proceedings and it would not be within the ken of
Section 27 to set aside the order of self-assessment and reassess
the duty for making refund; and in case any person is aggrieved by
any order which would include self-assessment, he has to get the
order modified under Section 128 or under other relevant
provisions of the Act." (emphasis supplied)
35. Thus, even the Supreme Court clearly indicated that the
modification of the assessment order can be either under Section 128
or under other relevant provisions of the Act i.e. Section 149.
36. Therefore, the stand of the respondents in the counter affidavit
that only reassessment under Section 128 is the remedy available to
the petitioner, and Section 149 cannot be invoked, is not tenable. We
also reject the plea of the 2nd respondent that there is no possibility of
getting modified an order of assessment under any other relevant
provision and that petitioner is trying to overcome limitations
stipulated in Section 128.
37. The only condition required to be fulfilled for seeking
amendment of documents such as a BoE under Section 149 is that
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such amendment should be sought on the basis of documentary
evidence which was in existence at the time the goods were cleared,
deposited or exported, as the case may be.
38. In the impugned order dt.07.02.2020, the 2nd respondent stated
that the judgment of the Supreme Court in M/s. SRF Ltd. (1 supra)
was delivered on 26.03.2015 and the same was not available/ in
existence at the time i.e. August, 2014 to January, 2015 when the
goods pertaining to the relevant BoEs were cleared, and so the
amendment that petitioner requested cannot be made to those BoEs.
39. It is clear that the 2nd respondent had taken the decision of the
Supreme Court as "documentary evidence" which was not in
existence at the time of clearance of the goods.
40. Law declared by the Supreme Court, unless made prospective
in operation in its judgment, is always deemed to be the law of the
land. It cannot be construed as applicable only after the date of
pronouncement of the judgment of the Supreme Court.
41. In M.A. Murthy v. State of Karnataka4, the Supreme Court
had declared:
" 8. ... Normally, the decision of this Court enunciating a
principle of law is applicable to all cases irrespective of its stage
of pendency because it is assumed that what is enunciated by the
Supreme Court is, in fact, the law from inception. The doctrine of
prospective overruling which is a feature of American
(2003) 7 SCC 517
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jurisprudence is an exception to the normal principle of law, was
imported and applied for the first time in L.C. Golak Nath v. State
of Punjab5.... It is for this Court to indicate as to whether the
decision in question will operate prospectively. In other words,
there shall be no prospective overruling, unless it is so indicated in
the particular decision. It is not open to be held that the decision in
a particular case will be prospective in its application by
application of the doctrine of prospective overruling. The doctrine
of binding precedent helps in promoting certainty and consistency
in judicial decisions and enables an organic development of the
law besides providing assurance to the individual as to the
consequences of transactions forming part of the daily affairs."
(emphasis supplied)
42. That apart, in our opinion, the term "documentary evidence"
used in Section 149, in the context of amendment to BoEs or like
documents, cannot include decisions of Courts.
43. In para 6.2 of the counter affidavit, the 2nd respondent admits
the principle laid down in M/s. SRF Ltd. (1 supra) and that importers
can take benefit of the same, but in the impugned order he has denied
to the petitioner benefit of the same by giving the untenable reason
that the judgment therein was delivered after the dates of clearance of
the goods. We deprecate this view of the 2nd respondent.
44. The last reason given by the 2nd respondent in the impugned
order to reject the amendment sought of the BoEs by the petitioner is
that for a different period he had rejected similar plea and the same
was confirmed by the Commissioner (Appeals) in Appeal No.31 of
2019 on 28.06.2019.
AIR 1967 SC 1643
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45. Admittedly, the said order has been challenged before the
CESTAT, Hyderabad in an Appeal and the said Appeal is pending. So
the said order has not attained finality.
46. Moreover, the said order was passed on 28.06.2019 prior to the
decision in ITC Ltd. (2 supra) on 18.09.2019. Once the Supreme
Court has clarified in para no.47 of ITC Ltd. (2 supra) that an order
of assessment can be modified either under Section 128 or under
other relevant provisions of the Act, and thus clarified that
modification of an order of assessment can also be sought under
Section 149 of the Act, its judgment has to be followed by the 2nd
respondent, as it is binding under Article 141 of the Constitution of
India.
47. He cannot refuse to follow it on the ground that the
Commissioner (Appeals) did not grant relief to the petitioner for the
different period. In fact, if the said decision in M/s. ITC Ltd.
(2 supra) had been rendered before the decision in the Appeal was
given by the Commissioner (Appeals), even the said officer would
have followed it.
48. Further, it is the duty and responsibility of the Assessing
Officer / Assistant Commissioner to correctly determine the duty
leviable in accordance with law before clearing the goods for Home
consumption. The assessing officer instead, having failed in correctly
determining the duty payable, has caused serious prejudice to the
importer / petitioner at the first instance. Thereafter, in refusing to
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amend the Bill of Entry under Section 149 of the Act, to enable the
importer / petitioner to claim refund of the excess duty paid, the
Assessing Authority / Assistant Commissioner caused further great
injustice to petitioner.
49. Also, the Assessing Authority has failed to consider the fact
that Section 149 of the Act does not prescribe any time limit for
amending the Bill of Entry filed and assessed. The power to amend
under Section 149 of the Act is a discretionary power vested with the
authority. Since, it is due to incorrect determination of duty by the
assessing authority initially, the petitioner is compelled to seek
amendment of Bill of Entry under Section 149 of the Act. Thus, the
importer / petitioner cannot be penalized for what the authority ought
to have done correctly by himself.
50. For the above reasons, we hold that the impugned order
dt.07.02.2020 passed in C.No.S/26/MISC/122-2020-ACC by the
2nd respondent cannot be sustained and is violative of Articles 14,
19(1)(g), 265 and 300A of the Constitution of India and also the
Customs Act, 1962, and it is accordingly set aside.
51. A Writ of Mandamus is issued to 2nd respondent to amend the
subject Bills of Entry under Section 149 of the Customs Act to reflect
the rate of tax as 1% as per Sl.No.263A(i) of Notification No.12/2012-
CE dated 17.03.2012 within four (04) weeks from the date of receipt
of copy of this order to enable the importer / petitioner to seek refund
of excess duty paid under Section 27 of Customs Act, 1962.
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52. Upon the petitioner making such application for refund of
excess duty levied and paid, it is for the concerned authority to further
look into the refund application and pass orders in the light of ratio
laid down by the Supreme Court in Mafatlal Industries Ltd., vs.
Union of India6 (the principle which is followed in relation to imports
for captive consumption in Union of India vs. Solar Pesticide (P)
Ltd.7).
53. Accordingly, the Writ Petition is allowed as above. No order as
to costs.
54. As a sequel, miscellaneous petitions pending if any in this Writ
Petition, shall stand closed.
____________________________
M.S.RAMACHANDRA RAO, J
___________________
T.VINOD KUMAR, J
Date: 12.08.2021
Ndr
(1997) 5 S.C.C. 536
(2000) 2 S.C.C. 705 = (2000) 116 E.L.T. 401 (S.C.)
