Chirag Textiles v. Commissioner of Customs

order or direction;

(c) XXXXXX XXXXXX"

¶14In the present case, the duty became refundable as a consequence of the order of the Supreme Court in Commissioner of Customs v. M/s Relaxo Rubber and Anr. under Civil Appeal no. 7180/7181 of 2001 on March 8, 2006.The refund application, therefore, must be filed by the assessee within one year from the date of the order in Relaxo Rubber, i.e. March 8, 2006.The refund application having been made on July 24, 2006 was thus made within the limitation period. Page 17

¶15It is pertinent to note that the decision in Sneh Enterprises (supra) is of no relevance in this case. The facts therein were that certain articles were imported by the appellant in April 2002, although a bill of entry was filed by the appellant with the Customs authorities on 22.5.2002. An anti-dumping duty was sought to be imposed vide a notification of 22.5.2002 on these goods. Revenue sought to apply Section 15 of the Customs Act, by which the taxable event occurs when the goods pass the Customs barrier, on the ground that Section 9A(8) of the CTA, as it stood then, applied retrospectively. The appellant sought to argue first, that the notification could not apply retrospectively to impose a duty upon goods that were imported prior to the notification on the ground that taxable event occurred on the date of import of the articles per Section 9A of the CTA i.e. in April 2002 and second, that Section 15 of the Customs Act could not apply through Section 9A(8) of the CTA, as Finance (No. 2) Act, 2004 (which it was argued, introduced Section 9A(8)) did not apply retrospectively to a notification in 2002. The Court held that the date of import was to be considered the date of passing the Customs barrier only in case of levy of customs duty; for all other duties including anti-dumping duties, the contract between the parties would determine the date of import in common law i.e. when the goods enter the territory of the importing country. In this context, the Court also held that the Parliament could not Page 18 have intended to incorporate Section 15 of the Customs Act (via Section 9A(8) of the CTA) prior to 2004 since "Sub-section (8) of Section 9A was introduced by Finance Act, 2004. Prior thereto, the statute did not contemplate application of the provisions of the Customs Act and the rules and regulations made thereunder." (para 6, Sneh Enterprises (supra)

¶16As is evident, the question of retrospective application of Section 9A(8) as it stands today did not arise in Sneh Enterprises (supra). The question before the Court in Sneh Enterprises (supra) was whether the Finance (No.2) Act, 2004 which amended Section 9A(8) could apply retrospectively to a 2002 notification, since the Amendment was otherwise to come into force w.e.f. 09.07.2004. On the other hand, the question before this Court is whether the 2009 Amendment of Section 9A(8) (Finance (No. 2) Act, 2009) has retrospective application w.e.f. 1st January, 1995, thus causing Section 27 of the Customs Act to apply over and above Sections 9A and 9AA of the CTA. The ruling in Sneh Enterprises (supra) thus is of no consequences to the question before this Court today.

¶17Moreover, it appears that the Supreme Court was under the impression that Section 9A(8) of the CTA was introduced by the Finance Act, 2004, although in reality, the provision was inserted Page 19 by Section 89 of the Finance Act,2000 (Act 10 of 2000). The original Section 9A(8) as inserted in 2000 read: "(8) The provisions of the Customs Act, 1962, (52 of 1962) and the rules and regulations made thereunder, relating to non-levy, short levy, refunds and appeals shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act." The provision was only amended by the Finance Act, 2004 to read: "(8) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, 4[relating to, the date for determination of rate of duty, non-levy, short-levy, refunds, interest, appeals, offences and penalties] shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act."

¶18To answer the question of retrospective application of the 2009 Amendment to Section 9A(8), it is pertinent to note that this amendment was made via the Finance (No. 2) Act, 2009 w.e.f. 1st January, 1995. Section 9A(8) now reads: "(8) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, including those relating to the date for determination of rate of duty, assessment, non-levy, short levy, refunds, interest, appeals, offences and Page 20 penalties shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act."

¶19Section 27 of the Customs Act is to be incorporated through this provision, as regards refund claims w.e.f. 1st Jan 1995, only "as far as may be" applicable, i.e. as far as is not covered by Sections 9A and 9AA of the CTA. As concluded earlier, since Section 9AA of the CTA is a complete code, Section 9A(8) has extremely restricted application in its allusion to provisions of the Customs Act, "so far as may be" in their application to the CTA itself.

¶20The questions of law framed are thus answered against the revenue and in favour of the assessee. The appeal is consequently dismissed. No costs. S. RAVINDRA BHAT (JUDGE) R.V. EASWAR (JUDGE) MARCH 10, 2014

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on: 10.03.2014 + CUSTOM. A. 3/2013, C.M. APPL.7238/2013 (for condonation of delay) COMMISSIONER OF CUSTOM, ICD, NEW DELHI ..... Petitioner Through: Sh. Priyadarshi Manish and Ms. Anjali Manish, Advocates. versus M/S. CHANDRA PRABHU INTERNATIONAL LTD. ..... Respondent Through: Sh. Rahul Kaushik, Advocate. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.V. EASWAR MR. JUSTICE S.RAVINDRA BHAT % 1. This is an appeal under Section 130 of the Customs Act, 1962, against the Final Order No. C/240/2011 CU [DB] dated 3.6.2011 of the Customs, Excise and Service Tax Appellate Tribunal ("CESTAT"). The appellant/Revenue feels aggrieved by the CESTAT's order directing refund of duty paid by the respondent/assessee. 2. The facts leading to this dispute are that the respondent (hereafter "the assessee") paid anti-dumping duty under protest Page 2 in respect of 27 bills of entry under Customs Tariff Heading No. 390390 (under the Customs Tariff Act – hereafter "CTA") for import of certain products into India, on which it was claimed that such duty was not leviable. Later, it made a refund claim for `28,85,394/- on 24.7.2006, which was adjudicated by the Assistant Commissioner (Refund) by an Order-in-Original No. 557/07 dated 25.5.2007. That order rejected the claim on the ground that the respondent should have in the first instance filed an appeal before the Commissioner (Appeals) challenging the assessment order imposing anti-dumping duty, as provided under Section 128 of the Customs Act. 3. The order relied on two decisions of the Supreme Court. The first was Commissioner of Customs v. Flock (India) Pvt. Ltd., 2000 (120) ELT 285 (SC), where the Court held that: "Where an adjudication authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the Statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority (sic) had committed an error in passing the order" 4. The revenue also relies on another decision, in Priya Blue Industries Ltd. v. Commissioner of Customs, (2005) 10 SCC 436, where the Supreme Court noted: Page 3 "6. We are unable to accept this submission. Just such a contention has been negatived by this Court in Flock (India)'s case (supra). Once an Order of Assessment is passed the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an Appeal that Order stands. So long as the Order of Assessment stands the duty would be payable as per that Order of Assessment. A refund claim is not an Appeal proceeding. The Officer considering a refund claim cannot sit in Appeal over an assessment made by a competent Officer. The Officer considering the refund claim cannot also review an assessment order. 7. We also see no substance in the contention that provisions for a period of limitation indicates that a refund claim could be filed without filing an Appeal. Even under Rule 11 under the Excise Act the claim for refund had to be filed within a period of six months. It was still held, in Flock (India)'s case (supra), that in the absence of an Appeal having been filed no refund claim could be made. 8. The words "in pursuance of an Order of assessment" only indicate the party/person who can make a claim for refund. In other words, they enable a person who has paid duty in pursuance of an Order of assessment to claim refund. These words do not lead to the conclusion that without the Order of assessment having been modified in Appeal or reviewed a claim for refund can be maintained." Page 4 5. The assessee's claim that the duty was mistakenly paid, without challenging the assessment order, was rejected. The assessee successfully appealed this order to the Commissioner of Customs (Appeals) (hereafter "CC(A)"). The CC(A) held that refund of anti-dumping duty was covered under the