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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, SUBRAMONIUM PRASAD, JJ.
COMMISSIONER OF CUSTOMS - Appellant
Versus
HINDUSTAN PETROLEUM CORPORATION LTD - Respondent
Civil Miscellaneous Appeal No. 986 of 2018; Referred Case Petition No. 2 of 2012
Decided on : 26-10-2018
Refund Application - Classification of Goods - [Section 27 of Customs Act, 1962] - [120 ELT 285(SC), 172 ELT 145 (SC), 143 ELT 482(SC)] - The court discussed the applicability of the Doctrine of Merger and the right to question the classification of goods in a refund application without challenging the assessment order. The court referred to the judgments in Collector of Central Excise, Kanpur Vs. Flock India Pvt. Ltd and Priya Blue Industries Ltd Vs. Commissioner of Customs (Preventive) to establish that an order which is appealable and not challenged cannot be questioned in a refund application. The court also considered the judgment in Karnataka Power Corporation Ltd Vs. Commissioner of Cus (Appeals), Chennai, to distinguish the present case where there was no separate challenge to the classification. The court concluded that the refund claim could not go behind the assessment order and allowed the appeal.
Fact of the Case:
The respondent imported goods and paid duty under protest. A refund claim was filed without challenging the assessment order. The authorities rejected the refund application, but the Tribunal allowed it. The revenue challenged the Tribunal's order, arguing that the classification of goods cannot be questioned in a refund application without challenging the assessment order.
Finding of the Court:
The court found that the refund claim could not go behind the assessment order and allowed the appeal.
Issues: 1. Whether the appellant could question the classification of the case in a refund application without challenging the assessment order. 2. Whether the revenue could pursue the R.C.P. after participating in the proceedings consequent to the remand order. 3. Whether the Tribunal could apply the Doctrine of Merger for dismissing the appeal of the revenue.
Ratio Decidendi: The court held that an order which is appealable and not challenged cannot be questioned in a refund application. The court also distinguished the present case from a previous judgment where there was a separate challenge to the classification. The court concluded that the refund claim could not go behind the assessment order and allowed the appeal.
Final Decision: The court allowed the Civil Miscellaneous Appeal.
SUBRAMONIUM PRASAD, J.
1. The instant appeal is directed against the order dated 30.09.2016 of the CESTAT, Chennai, in final order No.41693 of 2016.
2. The Respondent M/s. Hindustan Petroleum Corporation Limited imports systems hardwares and software vide Bill of Entry No.216574, on 02/05/2000. The goods so imported were assessed at Rs. 1,24,21,701/-. It is pertinent to mention that, it is stated by the respondent that the amount was paid under protest vide, letter No. VSPL:RLN:VVVP-01. Copy of the letter is not on record.
3. Admittedly, no appeal was filed challenging the said assessment. Contending that Excise duty has been wrongly paid under Bill of Entry No.216574, stating that there was mis classification of goods, a refund claim for Rs. 84,11,937/-, was presented on 06.11.2000. On 30.12.2000, the Assistant Commissioner of Customs, rejected the refund application.
4. An appeal was taken to the Commissioner (Appeals). The Commissioner (Appeals), vide, order, dated 27.09.2001, rejected the appeal. The Commissioner (Appeals) took the view that, since the order of assessment had attained finality, refund application on the ground that the amount was paid wrongly due to misclassification of goods could not have been entertained. The Commissioner (Appeals) relied on the judgment of the Hon'ble Supreme Court of India in the case of Commissioner of Central Excise, Kanpur Vs Flock India Pvt. Ltd, (2000) 120 ELT 285(SC)]. The order of the Commissioner (Appeals) was further challenged before the Customs, Excise and Gold (Control) Appellate Tribunal, South Zone. The Tribunal by its order, dated 24.04.2003, held that, when a refund claim is filed by the assessee by not accepting the classification and the rate of duty, etc., mentioned in the Bill of Entry, such refund claim is entertainable because the assessment also gets challenged by filing such refund claim. The Tribunal therefore, remanded the matter to the Adjudicating Authority for processing the refund claim.
5. The original authority once again looked into the matter and by an order dated 29.10.2003 relied on judgment of the Hon'ble Supreme Court of India in Flock India Pvt. Ltd [2000 (120) ELT 285(SC)] cited supra, to hold that, once the assessment has not challenged, it could not be challenged in a refund application. The order was once again taken up for appeal to the Commissioner Customs (Appeal), who by an order dated 31.03.2004 set aside the order dated 29.10.2003 with a direction to process the refund claim on merit. The Appellate Authority, relied on the judgment of the Hon'ble Supreme Court in Karnataka Power Corporation reported in 143 ELT 482. This order was not further challenged.
6. When the matter stood thus the order, dated 24/04/2003, passed by the CEGAT in final order No.291/2003, was challenged by the Revenue, by filing Referred Petition No.02/2012, in the High Court of Madras. The same was dismissed by the order dated 04.07.2013 on the ground that no question of law arose for consideration. The revenue thereafter, filed a Special Leave Petition before the Hon'ble Supreme Court of India against the order dated 04.07.2013, passed by this Court. The Special Leave Petition was withdrawn by the appellant on 7/2/2014 with liberty to file a review against the order dated 04.07.2013. The order of the Hon'ble Supreme Court reads as under:-
"Learned A.S.G appearing for the petitioner-revenue, on instructions, seeks permission of this Court to withdraw the Special Leave Petition with liberty to file an appropriate Review Petition before the High Court.
Permission sought for is granted.
The Special Leave Petition is disposed of as withdrawn.
If, for any reason, the petitioner does not succeed before the High Court, he is at liberty to question the main order as well as on the review order.
Ordered accordingly."
7. Review Petition No.167 of 2012 was filed in view of the liberty obtained from the Hon'ble Supreme Court.
8. For the third time, the adjudicating authority by an o
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