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2017 Supreme(AP) 427
IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
V. RAMASUBRAMANIAN, ABHINAND KUMAR SHAVILI, JJ.
The Commissioner of Customs - Appellant
Vs.
Gayatri Timbers Private Limited - Respondent
C.E.A. Nos. 57, 60, 61, 62, 66, 69, 71, 72, 74 & 75 of 2017
Decided On : 12-10-2017
Advocate Appeared:
For the Appellant : Mrs. Sundari R. Pisupati
For the Respondent: Mr. K. Vijay Kumar
Headnote:
Customs Act, 1962 - Section 130A, 25(1), sub-section (5) of Section 3 - Customs Tariff Act, 1975 - sub-section (5) of Section 3 - Appeals under Section of the Customs Act 1962, challenging the orders of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) allowing the claims for refund made - Conferred by Section of the Customs Act - Government of India exempted the goods falling within the First Schedule to the Customs Tariff Act from the whole of the additional duty of the customs leviable under Section of the Customs Tariff Act when imported into India for subsequent sale. Paragraph 2 of the said notification gave a list of conditions to be fulfilled by the importer, for availing the benefit of exemption - respondent-assessee filed claims for refund with the jurisdictional Customs Officer - All the claims made by the respondent-assessee were partially allowed by the jurisdictional Customs Officer - For easy appreciation of the extent to which the claims for refund were allowed - Contending that the grounds of rejection were not traceable to the exemption notification and that the imported material did not lose their character merely because of being cut into smaller pieces, the respondent-assessee filed statutory appeals before the Commissioner – Held, Orders-in-original incorporating the same conditions as found in the interim order of the Supreme Court in Variety Lumbers incorporating a condition that the refund was ordered subject to the outcome of the decision before the Court the department would have been better of. If the original authority had passed such an order department would have become entitled to recover the amount of refund in the event of their success before - Department let go this opportunity and invited an order on merits from the Tribunal - After suffering an order on merits from the Tribunal and without challenging the same, the department went before the Tribunal requesting them to incorporate the conditions as found in the interim order of the is why the Tribunal rejected the Miscellaneous Applications - the department could not have achieved anything, in the event of their success before the Supreme Court - Unless the department itself had ordered refund subject to the outcome of the appeal before the Court the department could not have achieved anything merely by making the Tribunal incorporate a condition for furnishing of bank guarantee to the extent of - Tribunal was right in rejecting the Miscellaneous second substantial of law is answered against the appellant/revenue - Appeals are dismissed.
V. Ramasubramanian, J.
The Revenue has come up with the above appeals under Section 130A of the Customs Act, 1962, challenging the orders of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowing the claims for refund made by the Assessee.
2. Heard Mrs. Sundari R. Pisupati, learned senior standing counsel for the Appellant and Mr. K. Vijay Kumar, learned counsel for the respondent-Assessee.
3. The respondent-Assessee imported timber logs under various bills of entry. The material imported by the respondent-assessee admittedly fall within the First Schedule to the Customs Tariff Act, 1975.
4. By a Notification bearing No.102/2007-Customs issued on 14-09-2007 in exercise of the powers conferred by Section 25(1) of the Customs Act, 1962, the Government of India exempted the goods falling within the First Schedule to the Customs Tariff Act, 1975, from the whole of the additional duty of the customs leviable under Section 3(5) of the Customs Tariff Act, 1975, when imported into India for subsequent sale. Paragraph 2 of the said notification gave a list of conditions to be fulfilled by the importer, for availing the benefit of exemption.
5. The respondent-assessee filed claims for refund with the jurisdictional Customs Officer. All the claims made by the respondent-assessee were partially allowed by the jurisdictional Customs Officer. For easy appreciation of the extent to which the claims for refund were allowed, we are presenting in a tabular column, the details.
| C.E.A. No. | Arising out of the Order-in-Original dtd | Amount of refund claimed | Amount of refund sanctioned |
| 57 of 2017 | 08-01-2013 | Rs.4,85,325.10 ps. | Rs.3,10,220.00 ps |
| 60 of 2017 | 28-09-2012 | Rs.3,71,000.40 ps. | Rs.1,72,849.00 ps |
| 61 of 2017 | 05-11-2012 | Rs.5,18,367.20 ps. | Rs.2,77,617.00 ps |
| 62 of 2017 | 20-12-2012 | Rs.9,83,594.00 ps. | Rs.8,68,328.00 ps |
| 66 of 2017 | 10-05-2013 | Rs.8,78,126.92 ps. | Rs.5,86,004.00 ps |
| 69 of 2017 | 20-12-2012 | Rs.7,28,970.20 ps. | Rs.3,90,440.00 ps |
| 71 of 2017 | 08-10-2012 | Rs.3,85,709.80 ps. | Rs.2,15,024.00 ps |
| 72 of 2017 | 17-09-2012 | Rs.8,82,612.10 ps. | Rs.6,58,667.00 ps |
| 74 of 2017 | 24-09-2012 | Rs.13,91,801.80ps | Rs.9,10,318.00 ps |
| 75 of 2017 | 05-11-2012 | Rs.7,84,837.00 ps | Rs.2,07,219.00 ps |
6. The disallowance of a part of the refund claim was on two grounds viz., (1) that the timber logs imported by the respondent- assessee were not sold as such by them, but were sold locally after sawning them and cutting them into smaller sizes; and (2) that the logs cut into smaller sizes could not correlate to the items described in the import packing list.
7. Contending that the grounds of rejection were not traceable to the exemption notification and that the imported material did not lose their character merely because of being cut into smaller pieces, the respondent-assessee filed statutory appeals before the Commissioner (Appeals). The Commissioner (Appeals), dismissed all the appeals forcing the respondent-assessee to file second appeals before CESTAT. The CESTAT allowed all the appeals relying upon the decision of the Gujarat High Court in Commissioner of Customs v. Variety Lumbers Private Limited (2012 TIOL-821-HC-AHM-CUS). The Tribunal took note of the fact that as against the judgment of Gujarat High Court, Special Leave Petitions were filed and that the Supreme Court had already granted leave and issued notices, but did not grant an interim stay of the judgment of Gujarat High Court.
8. As against the orders of the CESTAT, the Appellant/ Revenue did not choose to come up immediately with the statutory appeals under Section 130 A of the Customs Act. On the contrary, the Department filed Miscellaneous Applications before th
