A First Appellate Authority cannot direct the re-verification of a fact, such as the limitation period for a refund claim, if that fact was never disputed by the Revenue or raised by the Adjudicating Authority in the original proceedings.

Per: Shri P. Dinesha

This Appeal is filed against Order-in-Appeal No.198/2016 dated 24.02.2016 passed by Commissioner of Customs (Appeals-II), Chennai.

Heard Shri M.S. Nagaraja, Ld. Advocate for the Appellant and Ms. Anandalakshmi Ganeshram, Ld. Assistant Commissioner for the Respondent.

Facts in brief as could be gathered from the Order-in-Original, Order-in-Appeal and the arguments advanced before us are that the Appellant claimed by way of refund the excess duty paid as per the directions of the Department’s audit team and vide Order-in-Original No. 42276/2015 dated 16.10.2015, the Adjudicating Authority rejected the refund on the ground that the Assessee should have sought for rectification before claiming refund; without rectification refund claim was hit by the decision of Hon’ble Supreme Court in Priya Blue Industries Ltd. Vs. Commissioner of Customs, (Preventive) - 2004 (172) ELT 145 (S.C.), etc., which order, however, was not appreciated by the First Appellate Authority. The First Appellate Authority vide impugned order thus concluded that the Adjudicating Authority himself should have rectified the mistake since, admittedly, the excess of excise duty was paid at the insistence of the Revenue. However, the First Appellate Authority has, after setting aside the original order, directed the Adjudicating Authority to verify if the refund application filed by the Appellant was in time within the meaning of Section 27 of the Customs Act, 1962. This has been challenged by the Assessee before us in this Appeal and the primary contention of the Ld. Advocate was that this was never questioned by the Adjudicating Authority; and in any case, the application for refund was filed originally on 28.01.2009 itself, is very much within the time limitation provided under the statute and therefore, the direction by the Commissioner to verify/re-verify a fact which was never disputed, is not in accordance with law.

We find that the applicability of Circular No. 18/2008-Cus. dated 10.11.2008 which was relied on by both the parties, indicates that the value of export goods is required to be determined by treating the FOB price as cum–duty price. This fact though not applied in the Order-in-Original, but finally came to be accepted in the impugned order passed by the First Appellate Authority. Thus, according to us, the only fact which survived undisputed, was that there was an error in the computation of duty. This also has been the direction in the impugned order by the Commissioner, but however, in the order there is no mention nor is there any acknowledgement about the application filed by the Assessee in 2009, wherein it was explained this very fact, which resulted in excess payment of duty, leading to the claim of refund.

In view of the above and also the fact that the Original Authority did not dispute the filing of refund application in time, the order of the First Appellate Authority to examine afresh the claim of refund in terms of Section 27 , is clearly outside the scope of the very First Appeal since the Revenue did not even file counter nor did it dispute the date of filing of refund application. This observation is therefore unsustainable and requires to be set aside; the other part of the impugned order shall remain, to be executed. The Original Authority shall act based on the other directions except venturing into the domain of claim of the applicant in the context of Section 27 and the impugned Order is modified to this extent.

The Appeal stands allowed, partly, as indicated above.