Indian Petrochemicals Vs. Commissioner of Customs and Central - Court Judgment

Excerpt:
1. the appellant imported in 1998 and 1999 at dahej in gujarat consignments of polypropylene and ethylene. the goods were assessed to duty provisionally, as their value could not be ascertained in the absence of the invoice issued by the seller. subsequently, the assessments were finalised on various dates and the duty determined to be payable turned out to be less than the duty that was actually to be paid. it is stated that the authorities who passed the orders with which we are concerned in these appeals were not concerned with the liability to refund arising as a consequence of finalisation of provisional assessment and were only concerned with the application filed by the importer. the refund claims that the importer filed themselves make it clear that what it was claiming was a refund that as a result of finalisation of provisional assessment. it is only the failure on the part of the department to sanction the refund. paragraph 95 of the mafatlal industries on its own that resulted in its having to file his application. the departmental representative has no answer why the refund was not paid suo moto to the appellant on finalisation of the provisional assessment.4. in a situation where an importer not required to file a refund claim and does so, pending the refund claim that he was entitled to refund only because it has not been sanctioned, it is highly incorrect to deny the claim on the ground of limitation. the question of limitation would enter the scene. the department ought to have refunded the amount that fell due without any formal request or application made by the importer. therefore the fact that an application was made by the importer is irrelevant; at the most it can be treated as a remainder to the department. the decision of the tribunal in alcatel modi net works systems v. cc 2000 (117) elt 522 correctly points out that, by an application of the contents of paragraph 95 of the supreme court's judgment in mafatlal industries clarifies that recoveries of refunds consequent upon adjustment under rule 9b of the central excise rules will not be governed by section 11a or 11b of the act. this view will apply in equal force to refund consequent upon sub-section (2) of section 18 of the act. nor the provisional assessment requiring the importer an incidence of duty passed on will not apply.5. the appeals are accordingly, allowed and the impugned order set aside. the concerned official is directed to examine the refund claim, and if found admissible, pay the amount of refund forthwith to the appellant. we record, as the counsel for the appellant points out, that, after sanction of refund, necessary action will have to be taken by the central excise authorities in terms of rule 57e to adjust modvat credit taken of the additional duties of customs that were paid, to the extent that this has not already been done. he undertakes to furnish necessary information to the commissioner and jurisdictional deputy commissioner of central excise, vadodara, to whom also a copy of this order shall be issued.

Judgment:
1. The appellant imported in 1998 and 1999 at Dahej in Gujarat consignments of polypropylene and ethylene. The goods were assessed to duty provisionally, as their value could not be ascertained in the absence of the invoice issued by the seller. Subsequently, the assessments were finalised on various dates and the duty determined to be payable turned out to be less than the duty that was actually to be paid. It is stated that the authorities who passed the orders with which we are concerned in these appeals were not concerned with the liability to refund arising as a consequence of finalisation of provisional assessment and were only concerned with the application filed by the importer. The refund claims that the importer filed themselves make it clear that what it was claiming was a refund that as a result of finalisation of provisional assessment. It is only the failure on the part of the department to sanction the refund. Paragraph 95 of the Mafatlal Industries on its own that resulted in its having to file his application. The departmental representative has no answer why the refund was not paid suo moto to the appellant on finalisation of the provisional assessment.

4. In a situation where an importer not required to file a refund claim and does so, pending the refund claim that he was entitled to refund only because it has not been sanctioned, it is highly incorrect to deny the claim on the ground of limitation. The question of limitation would enter the scene. The department ought to have refunded the amount that fell due without any formal request or application made by the importer. Therefore the fact that an application was made by the importer is irrelevant; at the most it can be treated as a remainder to the department. The decision of the Tribunal in Alcatel Modi Net Works Systems v. CC 2000 (117) ELT 522 correctly points out that, by an application of the contents of paragraph 95 of the Supreme Court's judgment in Mafatlal Industries clarifies that recoveries of refunds consequent upon adjustment under Rule 9B of the Central Excise Rules will not be governed by Section 11A or 11B of the Act. This view will apply in equal force to refund consequent upon Sub-section (2) of Section 18 of the Act. Nor the provisional assessment requiring the importer an incidence of duty passed on will not apply.

5. The appeals are accordingly, allowed and the impugned order set aside. The concerned official is directed to examine the refund claim, and if found admissible, pay the amount of refund forthwith to the appellant. We record, as the counsel for the appellant points out, that, after sanction of refund, necessary action will have to be taken by the Central Excise authorities in terms of Rule 57E to adjust modvat credit taken of the additional duties of customs that were paid, to the extent that this has not already been done. He undertakes to furnish necessary information to the Commissioner and jurisdictional Deputy Commissioner of Central Excise, Vadodara, to whom also a copy of this order shall be issued.