In a recent case, the Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) allowed the refund of the excess amount of Customs duty paid due to an error in the EDI system.
M/s Synergy Steels Limited, the appellantchallenged the Orderpassed by the Commissioner (Appeals), Jaipur whereby the order of the adjudicating authority rejecting the refund claim being time-barred was upheld and the appeal was rejected.
The appellant filed the Bill of Entry No. 4529018 dated 23.12.2017 for the import of “Heavy Melting Steel Scrap” under CTH 72044900 and paid the normal rate of BCD @ 15%. The appellant was eligible for exemption of BCD @ 2.50% in terms of Notification No. 50/2017-Cus. dated 30.06.2017 under Sl. No. 368.
The appellantrequested the Deputy Commissioner of Customs, Jaipur to reassess the bill of entry and refund the excess duty paid by them. The authority reassessed the bill of entry, however, fail to refund the amount to the appellant which accrued by the reassessment. The appellant then once again requestedthe processing of their claim for a refund.
The Department issued a show cause notice, treating that the refund claim has been filed beyond one year from the date of reassessment dated 24.02.2018 and therefore the same was barred in terms of Section 27 of the Customs Act.
The adjudicating authority held that the letter dated 23.01.2018 was submitted before reassessment on 24.02.2018, i.e., at that point of time when no money was due to them as no reassessment was done at that stage. The reassessment was done on 24.02.2018 and therefore the refund claim on 29.04.2019 was beyond the period of one year from the date of assessment. The appeal filed by the appellant challenging the said order-in-original was rejected on the ground of delay in filing the appealand the matter was remanded back to the Commissioner (Appeals).
It was contended by the appellant that they filed the request for reassessment along with the refund of excess duty paid by them, as early as 23.01.2018 and the subsequent letter dated 29.04.2019 was merely a reminder as the authorities have not processed their refund claim nor had pointed out any deficiency. The authority which reassessed the bill of entry on 24.02.2018 did not refer to the claim of refund made by the appellant under the same letter.
It was viewed that based on the aforesaid letter the authorities reassessed the bill of entry on 24.02.2018 and found that the appellant had paid excess duty of Rs. 3,84,921/-, it was therefore obligatory on the part of the authority to refund the said excess amount recovered from the appellant in terms of the prayer made by them for reassessment as well as a refund of excess duty amount.
A single-member bench comprising of Ms Binu Tamta, member (judicial) held that “the letter dated 23.01.2018 whereby the prayer for reassessment and refund of excess duty paid was made must be treated as the date on which the refund claim has been made and therefore the same is within the period of limitation of one year as prescribed under Section 27 of the Customs Act. “
It was further viewed that after the amendment in 2011, it is no longer necessary for an assessment or reassessment order to be made and the refund can be considered under the provisions of Section 27 of the Act.
The CESTAT viewed that the appellant has paid the excess amount because of an error in the EDI system whereby the benefit of Notification No. 50/2017-Cus., was not appended and the same was brought to the notice of the authorities concerned vide letter dated 23.01.2018 along with the claim for refund of the amount wrongly paid.
While allowing the appeal, the Tribunal held that the authorities below have wrongly decided that the refund claim was made by the appellant on 29.04.2019 and the same was barred by time, being beyond the period of one year from the date of reassessment on 24.02.2018. The impugned order was set aside and allowed the appeal.
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